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INTERIM    REPORT 


ON 


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Laws  Relating  to  the 
Liability   of    Employers 


'  ■  ' ' 


To  Make  Compensation  to  their  Employees 
for  Injuries  received  in  the  course  of  their 
employment  which  are  in  force  in  other 
countries. 

By 

THE  HON.  SIR  WILLIAM  RALPH  MEREDITH,  C.J.,C.P., 

COMMISSIONER. 

With  the  Evidence  taken  and  the  Brief  of  Mr.  Wegenast, 
submitted   on  behalf   of   the   Canadian  Manufacturers' 

Association. 


PRINTED  BY  ORDER  OF 

THE  LEGISLATIVE  ASSEMBLY  OF  ONTARIO 


TORONTO : 
Printed  and  Published  by  L.  K.  CAMERON,  Printer  to  the  King's  Most  Excellent  Majesty 

19  12. 


W 


INTERIM    REPORT 


ON 


Laws  Relating  to  the 
Liability   of   Employers 

To  Make  Compensation  to  their  Employees 
for  Injuries  received  in  the  course  of  their 
employment  which  are  in  force  in  other 
countries. 


By 
THE  HON.  SIR  WILLIAM  RALPH  MEREDITH,  C.J.,C.P., 

COMMISSIONER. 

With  the  Evidence  taken  and  the  Brief  of  Mr.  Wegenast, 
submitted    on  behalf    of    the    Canadian  Manufacturers' 

Association. 


PRINTED  BY  ORDER  OF 

THE  LEGISLATIVE  ASSEMBLY  OF  ONTARIO 


TORONTO : 
3rinted  and  Published  by  L.   K.  CAMERON,    Printer  to  the   King's  Most   Excellent   Majesty 

19  12. 


Printed  by 

WILLIAM   BRIGGS, 

29-37  Richmond  Street  West, 

TORONTO. 


Contents. 


Page 

INTERIM    REPORT 5 

Schedule    I. — Brief  of  Trades  and  Labour  Congress  of  Canada 8 

Schedule   II. — Laws  of  European  Countries  and  the  Provinces  of  Canada  .  12 

Schedule   III. — Acts   Passed   by   State    Legislatures   in   the   United   States 

of  America 46 

BriefjOf  Canadian  Manufacturers'  Association 54 

Minutes  of  Evidence ]  34 

Alphabetical  List  of  Witnesses 468 

Short  Synopsis  of  Mr.  J.  H.  Boyd's  Brief 471 


31  3  k.o<& 


Interim  Report 


ON 

LAWS  RELATING  TO  THE  LIABILITY    OF  EMPLOYERS  TO  MAKE  COMPENSA- 
TION TO  THEIR  EMPLOYEES  FOR  INJURIES  RECEIVED  IN  THE  COURSE 
OF  THEIR  EMPLOYMENT   WHICH  ARE    IN  FORCE  IN  OTHER 
COUNTRIES,  AND  AS  TO    HOW  FAR  SUCH  LAWS 
ARE  FOUND  TO  WORK  SATISFACTORILY 

By 

THE  HON.  SIR  WILLIAM   RALPH   MEREDITH,  C.J.,C.P.,  Commissioner 


To  His  Honour  Sir  John  Morison  Gibson,  K.C.MG.,  K.C.,  LL.D.,  Lieutenant- 
Governor  of  the  Province  of  Ontario. 

May  it  Please  Your  Honour: 

I  have  the  honour  to  report  that  although  considerable  progress  has  been  made 
in  the  prosecution  of  the  inquiries  which  I  was  by  Your  Honour's  Commission 
bearing  date  the  30th  day  of  June,  1910,  appointed  to  make  "  as  to  the  laws  re- 
lating to  the  liability  of  employers  to  make  compensation  to  their  employees  for 
injuries  received  in  the  course  of  their  employment,  which  are  in  force  in  other 
countries,  and  as  to  how  far  such  laws  are  found  to  work  satisfactorily,"  I  am  as 
yet  unable  to  make  any  recommendation  for  enacting  in  this  Province  any  of  the 
provisions  of  these  laws,  or  to  report  a  bill  embodying  changes  in  the  law  which, 
in  my  opinion,  should  be  adopted. 

A  considerable  volume  of  oral  evidence  has  been  taken,  and  with  the  aid  of 
the  able  and  indefatigable  Secretary  of  the  Commission  a  large  mass  of  document- 
ary evidence  has  been  obtained  and  collated,  including  copies  of  the  laws  which 
have  been  enacted  in  the  countries  of  Europe  and  of  North  America. 

Sufficient  progress  has,  however,  been  made  to  warrant  the  statement  that 
the  law  of  Ontario  is  entirely  inadequate  to  meet  the  conditions  under  which  in- 
dustries are  now  carried  on  or  to  provide  just  compensation  for  those  employed 
in  them  who  meet  with  injuries  or  suffer  from  occupational  diseases  contracted  in 
the  course  of  their  employment. 

It  is  satisfactory  to  be  able  to  say  that  there  is  practical  unanimity  on  this 
point,  and  that  those  who  speak  for  the  employers  concede  the  justice  of  the  claim 
made  on  behalf  of  the  employees  that  the  industries  should  bear  the  burden  of 
making  compensation. 

The  employers,  however,  contend  that  the  whole  of  this  burden  should  not  be 
borne  by  them,  but  that  the  employees  should  share  it,  and  suggest  as  a  fair  con- 
tribution by  the  employees  10  per  cent,  of  the  amount  required  to  provide  for  the 
compensation. 

[5] 


INTERIM  REPORT  OF  COMMISSIONER:  No.  65 


This  contention  is  strt-xuovisly  opposed  by  the  employees  who  take  the  position 
that  the  whole  burden  should  be  borne  by  the  employers. 

The  basic  principle  that  the  burden  of  providing  compensation  should  be 
borne  by  the  industries  being  conceded,  the  question  arises  as  to  what  form  the 
legislation  necessary  to  give  effect  to  it  should  take. 

Those  representing  the  employers  who  have  appeared  before  me  favour  what 
is  practically  a  plan  of  mutual  insurance,  under  the  management  of  a  Board  ap- 
pointed by  the  Crown,  that  the  industries  should  be  divided  into  groups  or  classes, 
and  that  an  annual  assessment  should  be  made  by  the  Board  to  meet  the  claims 
for  the  preceding  year,  each  group  or  class  being  assessed  only  for  the  compensa- 
tion for  injuries  happening  in  establishments  within  it,  with  a  special  additional 
assessment  in  all  cases  to  provide  a  reserve  fund. 

This  plan  seems  to  be  favoured  by  the  representatives  of  labour  organizations, 
as  will  be  seen  from  their  statement  as  to  the  form  which,  in  their  opinion,  the 
proposed  legislation  should  take,  which  was  submitted  to  me — Schedule  1. 

There  being  practically  unanimity  on  the  part  of  the  employers  and  the  em- 
ployed as  to  these  two  main  principles,  it  would  seem  to  follow  that  it  is  reason- 
able that  they  should  form  the  basis  for  provincial  legislation,  and  as  at  present 
advised  I  shall  be  prepared  to  recommend  a  plan  such  as  is  proposed,  if,  after  care- 
ful and  thorough  inquiry  and  examination  I  am  satisfied  that  it  is  economically 
sound  and  workable. 

There  are  yet  to  be  considered  many  subsidiary  but  very  important  questions, 
and  among  them  the  following: 

1.  To  what  industries  or  employments  the  law  should  extend,  and  whether — 
(a)  As  in  most  countries  it  should  be  limited  to  dangerous  occupations; 

(6)  It  should  extend,  as  it  does  under  the  British  Act,  to  the  farming  in- 
dustry and  to  domestic  servants; 

(c)  It  should  extend  to  establishments  in  which  less  than  a  stated  number  of 
workmen  are  employed. 

2.  Whether  there  should  be  any  and,  if  so,  what  "  waiting  period  " — that  is,  a 
period  for  which  no  compensation  can  be  claimed  if  the  disability  resulting  from 
the  injury  does  not  last  beyond  it. 

3.  Whether  in  any  and,  if  so,  what  cases  the  employee  should  not  be  entitled 
to  compensation,  e.g.,  where  the  injury  is  the  result  of  a  serious  and  wilful  mis- 
conduct on  his  part,  or  drunkenness,  or  the  violation  of  law,  or  of  a  rule  of  the 
establishment. 

4.  Whether  the  compensation  provided  should  be  in  lieu  of  the  common  law  or 
other  statutory  right  of  the  employee  against  his  employer. 

5.  How  the  Board  should  be  constituted. 

6.  Whether  the  decisions  of  the  Board  should  be  final  or  subject  to  appeal, 
and,  if  appealable,  to  what  tribunal  the  appeal  shall  lie. 

Careful  inquiry  must  also  be  made  as  to  the  probable  cost  of  administration 
and  machinery  must  be  provided  for  collecting  the  assessments  and  for  the  investi- 
gation and  adjustment  of  claims,  and  this  machinery  must  be  made  as  simple  and 
inexpensive  as  possible. 

Whether  or  not  use  should  be  made  of  the  municipal  bodies  for  some  of  these 
purposes  is,  I  think,  worthy  of  serious  consideration. 

If  the  industries  are  to  be  divided  into  groups  or  classes,  care  will  have  to  be 
taken  in  the  selection  of  those  which  are  to  form  each  group. 

It  will  also  be  necessary  that  a  scale  be  adopted  according  to  which  the  indus- 
tries are  to  be  assessed,  as  this  will,  of  course,  vary  according  to  the  nature  of  the 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  7 

industry,  and  the  hazard  to  which  the  employees  are  exposed.  The  preparation  of 
this  scale  will  require  much  consideration  and  must  be  entrusted  to  experts. 

It  will  be  necessary  also,  in  order  to  provide  for  claims  during  the  first  year, 
that  a  special  contribution  be  made,  and  to  enable  an  estimate  to  be  formed  of  the 
rate  of  this  contribution  an  investigation  as  to  the  pay-rolls  of  the  industries 
within  the  scope  of  the  act,  and  other  inquiries  requiring  care  and  time  will  be 
requisite. 

I  have  thought  it  well  to  make  these  references  to  the  work  yet  to  be  done 
and  the  principal  points  to  be  considered  in  order  that  the  attention  of  those  in- 
terested may  be  directed  to  them,  and  that  they  may  be  prepared  to  assist  me  by 
such  suggestions  as  occur  to  them  in  the  solution  of  the  questions  yet  to  be  dealt 
with. 

With  the  same  object  I  annex  Schedules  containing  a  statement  of  the  prin- 
cipal features  of  the  laws  of  other  countries,  Schedules  2  and  3. 

All  of  which  is  respectfully  submitted. 

W.  R.  Meredith, 

Commissioner. 

Dated  at  Toronto  this  27th  day  of  March,  1912. 


8  TEADES  AND  LABOUR  CONGRESS  OF  CANADA:         No.  65 

SCHEDULE  I 
BRIEF  OF  TRADES  AND  LABOUR   CONGRESS   OF  CANADA. 

Sir  William  Meredith,  Commissioner  of  the  Provincial   Government, 

Re  Workmen's  Compensation  Legislation. 

Sir, — Understanding  that  it  is  the  desire  of  the  Commission  to  make  recom- 
mendations for  a  Workmen's  Compensation  Act  in  harmony  with  modern  indus- 
trial conditions,  we-  have  the  honour  to  submit  herewith  recommendations  for  a 
Workmen's  Compensation  Act  for  the  Province  of  Ontario. 

These  recommendations  have  been  discussed,  and  unanimously  agreed  to,  by 
representatives  of  the  Dominion  Trades  and  Labour  Congress,  Toronto  Central 
Labour  Council,  The  Building  Trades  Council  of  Toronto,  and  the  Metal  Trades 
Council,  whose  signatures  are  appended  hereto. 

We  also  understand  that  it  is  the  expressed  desire  of  the  Commission  to  report 
to  the  next  session  of  His  Majesty's  Provincial  Legislature,  the  conclusions  and 
recommendations  for  legislation,  of  this  Commission,  on  this  subject.  We,  there- 
fore, have  lost  no  time  in  taking  the  matter  up,  to  suit  the  convenience  of  the  Com- 
mission. 

We  propose  to  give  plainly;  therefore,  the  fundamental  principles  which  we 
believe  should  be  the  basis  for  construction  of  a  new  Workmen's  Compensation  Act 
in  this  Province. 

It  is  unnecessary  to  refer  to  the  present  legislation  in  Ontario.  Its  uselessness 
has  been  pointed  out  for  years  by  representatives  of  labour,  its  obsoleteness  indeed, 
preventing  almost  anyone  from  even  an  attempt  to  defend  it. 

The  ancient  character  of  the  present  legislation  may  make  it  seem  to  many 
that  a  new  act  in  harmony  with  modern  conditions,  with  modern  legislation  in 
countries  that  have  made  serious  attempts  to  solve  the  question,  is  in  the  nature 
of  radical  legislation,  but  that  is  merely  because  the  matter  has  been  so  long 
neglected  in  Ontario. 

We  propose  that  the  new  act  shall  cover: — 

1.  All  employments,  the  employees  of  the  Province,  Municipality,  County,  or 
other  administrative  bodies  in  the  Province  to  be  covered  the  same  as  employees  in 
industries. 

2.  Compensation  for  all  injuries  arising  out  of,  and  in  the  course  of  employ- 
ment. 

3.  Compensation  for  being  disabled,  or  other  injuries  arising  out  of,  or  as  the 
result  of  a  specified  occupation,  the  said  disablement  and  injuries  being  in  the 
nature  of  occupational  diseases. 

4.  Entire  cost  of  compensation  to  rest  upon  employer. 

5.  In  the  cose  of  in  juries  resulting  in  death,  the  dependants,  as  outlined  in 
the  British  Act  and  State  of  Washington  Act,  shall  be  the  beneficiaries,  ivith  the 
expenses  of  the  funeral  as  outlined  also. 

H.  The  doctrine  of  negligence  on  the  part  of  employee  or  employer,  fellow- 
servant  or  otherwise,  shall  hare  no  place  in   the  new  legislation. 

7.  State  insurance  in  connection  with  Compensation  Act. 

8.  The  creation  of  a  Provincial  Deparlnirnl  of  Insurance  with  three  Commis- 
sioners for  the  purpose  of  administration   of  the  act. 


1912  WOKKMEN'S  COM PKXSATIOX  COMMISSION.  9 

9.  Compulsory  insurance  of  employers  in  the  State  Department  by  a  yearly 
tax  levied  upon  the  industry  or  occupation,  covering  the  risk  of  the  particular  in- 
dustry or  occupation. 

10.  The  tax  shall  he  upon  the  yearly  wage-roll. 

11.  No  employer  shall  attempt  to  pay  the  lax  by  deduction  of  wages  of  em- 
ployee, by  agret  ment  or  otherwise,  such  action  to  be  regarded  as  a  gross  misde- 
meanour as  provided  for  in  the  stale  of  Washington  legislation. 

12.  The  schedules  of  payment  under  the  act,  to  be  based  upon  the  payments 
under  the  British  Act,  with  the  proportional  increases  due  to  the  difference  in  the 
wages  in  Ontario,  reflecting  the  difference  in  the  cost  of  living. 

13.  The  Provincial  Government  shall  provide  revenue  for  the  creation  of  the 
Department  of  Insurance. 

The  following  will  give  you  some  idea  of  the  weight  of  opinion  in  favor  of  the 
burden  being  borne  by  the  employer,  or  industry  alone: 

Great  Britain. — The  employers  alone  bear  the  burden,  and  they  insure  volun- 
tarily in  state,  -mutual,  or  private  stock  companies. 

Norway. — Employers  bear  the  burden,  and  State  insurance  is  compulsory. 

Sweden. — Employers  bear  the  burden  and  insure  as  in  Great  Britain. 

Holland. — Employers  bear  the  burden  by  compulsory  insurance  in  State, 
mutual  or  private  organization. 

Den  mark. — Employers  bear  the  burden  and  insure  as  in  Great  Britain,  but 
insurance  is  compulsory. 

Belgium. — Employers  bear  the  burden  by  voluntary  insurance  as  in  Great 
Britain. 

France. — -Employers  bear  the  burden  by  voluntary  insurance  as  in  Great 
Britain. 

Italy. — Employers  bear  the  cost  by  compulsory  insurance,  but  insure  in  State, 
mutual,  or  otherwise  as  in  Great  Britain. 

Germany. — Employers  bear  the  cost  of  workmen's  compensation.  Insurance  is 
compulsory*  in  State,  mutual,  trade  associations,  or  State  Executive  Boards. 

Wage-earners  covered  by  such  compensation : 

Great  Britain    13,000,000 

Norway 400,000 

Sweden 1,000,000 

Holland 1,000,000 

Belgium 2,100,000 

France 9,500,000 

Italy 10,000,000 

Germany 15,000,000 

Total 52,000,000 

Fifty-two  million  workers  covered  by  compensation  legislation,  in  which  the 
whole  burden  is  on  the  employer  or  industry. 

There  are  those  who  confuse  the  contributory  schemes  of  sick  insurance,  in- 
validity and  old  age,  with  compensation  legislation,  but  tins  Commission  is  not 
dealing  with  social  insurance,  only  so  far  as  it  affects  compensation  for  accidents, 
fatal  or  otherwise,  arising  out  of  or  in  the  course  of  employment,  and  we,  there- 
fore, deal  with  it  as  such. 


10       TRADES  AND  LABOUR  CONGRESS  OF  CANADA:    No.  65 

The  doctrine  of  contributory  negligence  was  the  always  fruitful  source  of 
litigation,  and  as  the  position,  "  that  the  worker  would  injure  himself  to  obtain 
compensation  "  has  become  untenable,  as  well  as  the  fact  that  if  a  workman  takes 
risks,  it  is  generally  because  in  the  nature  of  his  employment,  conditions  make  him 
do  so,  this  doctrine  has  almost  wholly  passed  away.  It  exists  mostly  in  old  legis- 
lation on  the  matter. 

The  tendency  of  thought  in  Europe  as  well  as  North  America  is  toward  com- 
pulsory State  Insurance. 

The  British  Act,  an  admirable  one,  is  found  to  be  in  need  of  improvement  in 
this  direction,  as  the  British  Trades  Congress,  the  mouthpiece  of  organized  labour, 
is  seeking  to  have  established  compulsory  State  Insurance  in  connection  with  the 
act. 

The  Manitoba  Act,  modelled  upon  British  legislation,  is  found  to  be  wanting 
improvement  in  this  direction  also,  as  the  Central  Labour  Council  in  Winnipeg  has 
expressed  itself  a  short  time  ago  as  intending  to  seek  compulsory  State  Insurance 
in  connection  with  the  legislation. 

The  splendid  legislation  of  the  State  of  Washington  recently  placed  in  opera- 
tion with  a  State  Department  of  Insurance,  and  a  declaration  of  police  power,  is 
worthy  of  your  most  serious  attention,  from  which  we  quote  the  following : 

"  The  common  law  system  governing  the  remedy  of  workmen  against  em- 
ployers for  injuries  received  in  hazardous  work  is  inconsistent  with  modern  indus- 
trial conditions.     In  practice  it  proves  to  be  economically  unwise  and  unfair. 

"  Its  administration  has  produced  the  result  that  little  of  the  cost  of  the  em- 
ployer has  reached  the  workmen,  and  that  little  only  at  large  expense  to  the  public. 
"  The  remedy  of  the  workman  has  been  uncertain,  slow  and  inadequate. 
"  Injuries  in  such  works,  formerly  occasional,  have  become  frequent  and  in- 
evitable. 

"  The  welfare  of  the  State  depends  upon  the  industries,  and  even  more  upon 
the  welfare  of  its  wage-worker. 

"  The  State  of  Washington,  therefore,  exercising  herein  its  police  and  sov- 
ereign power,  declares  that  all  phases  of  the  premises  are  withdrawn  from  private 
controversy,  and  sure  and  certain  relief  for  workmen,  injured  in  extra  hazardous 
work  and  their  families  and  dependants,  is  hereby  provided,  regardless  of  questions 
of  fault,  and  to  the  exclusion  of  every  other  remedy,  proceeding  or  compensation, 
except  as  otherwise  provided  in  this  act;  and  to  that  end  all  civil  actions  and  civil 
causes  of  actions  for  such  personal  injuries  and  all  jurisdiction  of  the  courts  of 
the  State  over  such  cases  are  hereby  abolished,  except  as  in  this  act  provided." 

Surely,  Sir,  this  must  commend  itself  as  a  guide  for  administration  of  com- 
pensation, without  litigation,  such  as  anyone,  having  at  heart  the  welfare  of  the 
workers  might  follow. 

Perhaps  the  best  feature  of  the  Washington  legislation  is  the  fact  that  it 
makes  for  the  prevention  of  accidents,  which  we  regard  as  more  important  than 
compensation.  The  taxing  of  industries,  according  to  their  respective  risks,  is  an 
incentive  to  the  employers  to  reduce  the  risks,  which  means  a  reduction  of  the 
yearly  premium. 

It  is  only  by  making  risks  expensive  in  industry  to  employers  that  we  can  hope 

to  reduce  them  to  a  minimum. 

Contracting-out  clauses,  sub-contractors'  liabilities,  all  the  aggravating  ques- 
tions of  controversy  and  litigation,  could  be  obviated  by  provincial  compulsory  in- 
surance, with  a  department  of  administration,  in  connection  with  which  the  Pro- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  11 

vincial  Health  Department  could  on  investigation  among  the  workers  of  vOntario, 
tabulate    what  are  occupational  diseases  in  our  own  Province. 

We  believe  that  an  act  modelled  upon  the  British  Act  in  principle,  with  the 
compulsory  State  Insurance  of  the  Washington  Act,  with  its  police  administration 
and  tax  upon  industry,  as  a  preventative  for  accidents,  would  be  the  best  for  the 
workers  as  well  as  for  the  employers. 

With  regard  to  the  sum  of  compensation  in  the  schedules,  we  will  be  willing 
if  you  decide  on  the  British  Act  altogether,  to  work  out  the  payments  for  Ontario, 
taking  into  consideration  the  different  financial  proportions  of  wages  and  cost  of 
living. 

We  would  say,  however,  that  if  you  follow  the  British  Act  completely,  it  should 
cover  all  workers  in  Ontario  getting  less  than  Two  Thousand  Dollars  a  year. 

If,  on  the  other  hand,  you  -should  favour  the  act  of  the  State  of  Washington, 
we  will  endeavor  to  prove  to  you  that  some  of  the  payments  made  by  the  month  are 
too  low. 

Anything  less  than  either  of  these  two  acts  will  be  inadequate  to  meet  the 
needs  of  the  workers  of  Ontario,  and  as  this  Province  is  the  manufacturing  centre 
of  our  Dominion,  we  claim  that  the  legislation  that  should  be  adopted  and  which 
we  desire  is  that  pointed  out  by  the  fundamental  principles  we  have  laid  down  for 
your  consideration. 

Any  further  evidence  you  may  need  we  will  be  only  too  pleased  to  procure,  and 
we  ask  yon  to  request  our  co-operation  for  this  purpose  at  any  time. 

Signed  by  the  following  representatives,  composing  the  combined  committee: 

Trades  and  Labour  Congress  of  Canada: 

Fred.  Bancroft,  Vice-President, 
Joseph  Gibbons, 
J.  W.  Doggett. 

Toronto  District  Trades  and  Labour  Council: 
Frank  McCann,  President, 
Henry  R.  Barton,  Secretary. 

Metal  Trades  Council  of  Toronto: 
James  H.  H.  Ballantyne, 
Joseph  Helliker. 

Building  Trades  Council  of  Toronto: 
William  Nettleship,  President. 


Andrew  Miller,  Business  Agent,  Brotherhood  of  Carpenters. 


Joint  Executive  Board  of  the  Carpenters'  Organizations,  Toronto 

H.  A.  Ryder, 
Gerald  Baines, 
A.  J.  TJdall, 

George  Thomson. 


12  EUROPEAN  AND  CANADIAN  LAWS:  No.  65 


SCHEDULE  II 

LAWS  OF  EUROPEAN  COUNTRIES  AND  THE  PROVINCES  OF 

CANADA. 

Albekta. 

Date  of  enactment.     March  5,  1908,  in  effect  January  1,  1909. 

Injuries  compensated.  Injuries  by  accident  arising  out  of  and  in  the  course 
of  the  employment  which  cause  death  or  disable  a  workman  for  at  least  two  weeks 
from  earning  full  wages  at  the  work  at  which  he  was  employed.  Compensation  is 
not  paid  when  injury  is  due  to  serious  and  wilful  misconduct  of  the  workman, 
unless  the  injury  results  in  death  or  permanent  disablement. 

Industries  covered.  Railways,  factories,  mines,  quarries,  engineering  work, 
construction,  repair  and  demolition  of  buildings,  either  over  30  feet  in  height,  or 
with  the  use  of  mechanical  power. 

Persons  compensated.  Any  person  employed  in  manual  labour,  and  other  em- 
ployees whose  remuneration  does  not  exceed  $1,200  a  year. 

Government  employees.  Government  employees  are  covered  by  this  act  if  em- 
ployed in  establishments  or  undertakings  to  which  the  law  applies. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death: 

(a)  To  those  entirely  dependent  on  earnings  of  deceased,  a  sum  equal  to 
three  years'  earnings,  but  not  less  than  $1,000,  nor  more  than  $1,800. 

(&)  To  those  partially  dependent  on  earnings  of  deceased,  a  sum  less  than 
above  amount,  to  be  agreed  upon  by  the  parties  or  fixed  by  arbitration. 

(c)  Temporary  payments  previously  made  to  be  deducted    from    the    above 

amounts. 

(d)  If  the  deceased  leaves  no   dependants,  reasonable   expenses   of   medical 

attendance  and  burial,  but  not  to  exceed  $200. 

Compensation  for  disability.  (1)  A  weekly  payment  of  not  more  than  50  per 
cent,  of  employee's  weekly  earnings,  but  not  exceeding  $10  a  week,  for  employees 
21  years  and  over,  or  earning  $10  a  week  and  over;  (2)  100  per  cent,  of  employee's 
earnings,  but  not  exceeding  $7.50  a  week  for  employees  under  21  years  of  age  and 
earning  less  than  $10. 

For  partial  disability,  such  weekly  payment  "as  may  appear  proper  "  with  re- 
gard to  the  difference  between  employee's  average  weekly  earnings  before  the  acci- 
dent and  average  weekly  amount  which  he  is  earning  or  able  to  earn  after  the 
injury,  but  not  to  exceed  the  amount  of  the  difference. 

A  lump  sum  may  be  substituted  for  the  weekly  payments  after  six  months,  on 
the  application  of  the  employer,  the  amount  to  be  settled  by  agreement  or  by  the 
courts. 

Revision  of  compensation.     Weekly  payments  may  be  revised  at  request  of 

either  party. 

Insurance.  Employers  may  make  contracts  with  employees  for  substitution 
of  a  scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions  of  the 
act,  if  the  Attorney-General  certifies  that  the  scheme  is  not  less  favourable  to  the 
workmen  and  their  dependants  than  the  provisions  of  the  act,  and  that  a  majority 
of  the  workmen  are  favourable  to  the  substitute.  The  employers  are  then  liable 
only  in  accordance  with  1lie  provisions  of  the  scheme. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  13 

Guarantee  of  Payment.  In  case  of  employer's  bankruptcy  the  amount  of  com- 
pensation due  under  this  act,  up  to  $500  in  any  individual  case,  is  classed  as  a  pre- 
ferred claim,  or  when  an  employer  has  entered  into  a  contract  with  insurers  in 
respect  of  any  liability  under  the  act  to  any  workman,  such  rights  of  the  em- 
ployer, in  case  he  becomes  bankrupt,  arc  transferred  to  and  vested  in  the  workman. 

Settlement  of  disputes.  Disputes  arising  under  the  act  are  settled  by 
arbitration,  either  by  an  arbitration  committee  representing  employer  and  em- 
ployees, or  by  an  arbitrator,  or  in  absence  of  an  agreement  by  the  court.  The 
Attorney-General  may  confer  upon  such  arbitration  committee  any  or  all  of  the 
powers  of  courts  in  connection  with  the  act. 

Austria. 

Date  of  enactment.  December  28,  1887 ;  in  effect  November  1,  1889. 
Amendatory  Acts,  March  30,  1888;  April  4  and  July  28,  1889;  January  17,  1890; 
December  30,  1891;  September  17,  1892;  July  20,  1894,  and  July  12,  1902. 

Injuries  compensated.  All  injuries  causing  death  or  disability  for  more  than 
three  days  received  in  the  course  of  employment,  unless  caused  intentionally. 

Industries  covered.  Mining,  quarrying,  stone-cutting,  manufacturing,  build- 
ing trades,  railways,  transportation  on  inland  waters,  storage,  theatres,  chimney 
sweeping,  street  cleaning,  building,  cleaning,  sewer  cleaning,  dredging,  well  dig- 
ging, structural  iron  working,  etc. ;  agricultural  and  forestry  establishments  using 
machinery. 

Persons  compensated.  All  workmen  and  technical  officials  regularly  employed, 
but  in  agriculture  and  forestry  only  employees  exposed  to  machinery. 

Government  employees:  Act  applies  to  government  employees  unless  an  equal 
or  more  favourable  compensation  is  provided  by  other  laws. 

Burden  of  payment.  Medical  and  surgical  treatment  for  twenty  weeks  and 
compensation  for  four  weeks  of  disability  paid  by  sick  funds,  to  which  employers 
contribute  one-third  and  employees  two-thirds.  Compensation  for  disability  after 
fourth  week,  and  for  death,  paid  by  territorial  insurance  associations,  to  which 
employees  contribute  10  per  cent,  and  employers  90  per  cent. 

Compensation  for  death: 

(a)  Funeral  expenses,  not  to  exceed  25  florins  ($10.15). 

(b)  Pensions  to  members  of  family,  not  to  exceed  50  per  cent,  of  earnings  of 

deceased.  To  widow,  20  per  cent,  until  death  or  remarriage;  in  the 
latter  case  a  lump  sum  equal  to  three  annual  payments;  to  dependent 
widower,  20  per  cent,  during  disability.  Each  legitimate  child,  15  years 
of  age  or  under,  15  per  cent,  when  one  parent  survives  and  20  per 
cent,  when  neither  survives ;  to  each  illegitimate  child,  15  years  of  age 
or  under,  10  per  cent. ;  pensions  of  widow  (or  widower)  and  children 
reduced  proportionately  if  they  aggregate  over  50  per  cent. 

(c)  When  pensions  to  above  heirs  do  not  reach  50  per  cent.,  dependent  heirs 

in  ascending  line  receive  pensions,  not  to  exceed  20  per  cent  of  earn- 
ings of  deceased,  parents  taking  precedence  over  grandparents. 

(d)  In  computing  pensions,  the  excess  of  the    annual    earnings    over    1,200 

florins  ($487.20)  is  not  considered. 
Compensation  for  disability: 

(a)  Medical  and  surgical  attendance  for  20  weeks,  paid  by  sick  benefit  fund. 

(b)  For  total  temporary  or  permanent  disability,  60  per  cent,  of  average  daily 

wages  of  insured  workmen  in  the  locality,  paid  by  sick  benefit  funds, 


14  EUROPEAN  AND  CANADIAN  LAWS:         No.  65 


from  first  to  twenty-eighth  day;  and  60  per  cent,  of  average  annual 
earnings  of  injured  person,  after  twenty-eighth  day,  paid  by  territorial 
accident  insurance  institutions. 

(c)  For  partial  temporary  or  permanent  disability,  benefits  consist  of  a  por- 

tion of  above  allowance,  but  may  not  exceed  50  per  cent,  of  average 
annual  earnings. 

(d)  In  computing  payments,  the  excess  of  annual  earnings  over  1,200  florins 

($487.20)  is  not  considered. 

Revision  of  compensation.  Eeconsideration  of  the  case  may  be  undertaken  by 
the  insurance  association  of  its  own  will,  or  upon  petition. 

Insurance.  Payments  are  met  by  mutual  insurance  associations  of  employers 
in  which  all  employees  are  required  to  be  insured.  The  country  is  divided  into 
districts,  with  a  separate  association  for  each  district. 

Guarantee  of  payments.  Operations  of  the  insurance  associations  are  con- 
ducted under  the  supervision  of  the  Minister  of  Interior,  who  may  increase  the 
assessments. 

Settlement  of  disputes.  Disputes  are  settled  by  arbitration  courts  composed 
of  a  judicial  officer  appointed  by  the  Minister  of  Justice,  two  experts  appointed  by 
the  Minister  of  the  Interior,  and  one  representative  each  of  the  employers  and  the 
employees. 

Belgium. 

Date  of  enactment.     December  24,  1903,  in  effect  July  1,  1905. 

Injuries  compensated.  All  injuries  by  accident  to  employees  in  the  course 
of  and  by  reason  of  the  execution  of  the  labour  contract,  causing  death  or  disability 
for  over  one  week,  unless  intentionally  brought  on  by  the  person  injured. 

Industries  covered.  Practically  all  establishments  in  mining,  quarrying, 
forestry  work,  manufacturing,  building  and  engineering  work,  transportation,  and 
telephone  and  telegraph  services;  establishments  using  mechanical  motive  power; 
industrial  establishments  employing  five  or  more  persons;  agricultural  and  com- 
mercial establishments  employing  three  or  more  persons;  industries  designated  by 
royal  decree  as  dangerous.     Other  industries  at  option  of  employer. 

Persons  compensated.  Workmen  and  apprentices,  and  salaried  employees 
exposed  to  the  same  risks  as  workmen  whose  annual  salaries  do  not  exceed  2,400 
francs  ($463.20). 

Government  employees.  Act  covers  employees  of  any  public  establishment 
engaged  in  industries  enumerated  above. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death: 

(a)  Funeral  benefit  of  75  francs  ($14.48). 

(b)  A  sum  representing  value  of  an  annuity  of  30  per  cent,  of  annual  earn- 

ings of  deceased,  calculated  upon  basis  of  bis  age  at  death,  to  be  dis- 
tributed to: 

Dependent  widow  or  widower,  whole  amount  if  no  other  heirs,  four-fifths  if 
one  child  under  16  years  of  age  or  one  or  more  dependent  heirs,  three- 
fifths  if  two  or  more  children. 

Children  under  16  years  of  age,  the  residue. 

Dependent  heirs  in  ascending  line  and  descending  line  under  16  years  of 
age,  in  absence  of  widow  or  widower  or  children  under  16  years  of  age. 

Dependent  brothers  and  sisters  under  16  years  of  age,  in  absence  of  heirs 
-     •  above  enumerated. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  15 

(c)  Allowances  in  case  of  annual  wages  of  2,400  francs   ($463.20)   or  more, 

or  of  365  francs  ($70.45)  or  less,  are  based  upon  these  amounts, 
respectively. 

(d)  Payments  to  widow  and  heirs  in  ascending  line  are  converted  into  life 

pensions,  those  to  other  heirs  into  pensions  expiring  at  age  of  16  years. 
Heirs  may  require  one-third  of  capital  value  of  life  pensions  to  be  paid 
in  cash  and  pension  reduced  accordingly. 
Compensation  for  disability: 

(a)  Expense  of  medical  and  surgical  treatment  for  not  over  six  months. 

(b)  If  totally  disabled,  an  allowance  of  50  per  cent,  of  daily  wages,  beginning 

with  the  day  after  accident. 

(c)  If  partially  disabled,  an  allowance  of  50  per    cent,    of    loss    of    earning 

power,  beginning  with  day  after  accident. 

(d)  If,  after  three  years,  disability  is    permanent,    temporary    allowance    is 

replaced  by  life  annuity.  Victim  may  require  one-third  of  capital 
value  of  pension  to  be  paid  in  cash  and  pension  reduced  accordingly. 

(e)  Allowances  in  case  of  annual  wages  of  2,400  francs  ($463.20)  or  more,  or 

of  365  francs  ($70.45)  or  less,  are  based  upon  these  amounts  respec- 
tively. • 

Revision  of  compensation.  Eevision  of  compensation  because  of  aggravation 
or  diminution  of  disability,  or  death  of  victim,  may  be  made  within  three  years. 

Insurance.  Employers  may  transfer  burden  of  payment  of  compensation  to 
establishment  funds,  or  to  approved  insurance  companies,  or  to  general  savings  and 
retirement  fund.  They  may  also  transfer  burden  of  payment  of  temporary  allow- 
ances to  mutual  aid  societies. 

Guarantee  of  payment.  Employers  who  have  not  relieved  themselves  of  lia- 
bility by  insurance  must  make  deposits  of  cash  or  securities  or  give  real  estate 
mortgages  to  secure  pension  payments.  To  secure  temporary  disability  payments 
•of  uninsured  employers,  a  State  guaranty  fund  is  maintained  by  a  tax  levied  upon 
such  employers. 

Settlement  of  disputes.  The  local  justice  of  the  peace  has  sole  jurisdiction 
as  a  court  of  first  resort  over  disputes  arising  under  the  Act,  and  his  judgment  is 
final  in  all  cases  involving  300  francs  ($57.90)  or  less. 


British  Columbia. 

Date  of  enactment.     June  21,  1902,  in  effect  May  1,  1903;  R.  S.  1911,  c.  244. 

Injuries  compensated.  Injuries  by  accident  arising  out  of  and  in  the  course 
•of  the  employment  which  cause  death  or  disable  a  workman  for  at  least  two  weeks 
from  earning  full  wages  at  the  work  at  which  lie  was  employed,  unless  the  injury 
is  "attributable  solely  to  the  serious  and  wilful  misconduct  or  serious  neglect'1 
of  the  injured  workman. 

Industries  covered.  Railways,  factories,  mines,  quarries,  engineering  work, 
and  buildings  which  exceed  40  feet  in  height  and  arc  being  constructed  or  repaired 
by  means  of  a  scaffolding  or  being  demolished  or  on  which  machinery  driven  by 
mechanical  power  is  used  for  construction,  repair  or  demolition. 

Persons  compensated.     All  persons  engaged  in  manual  labour  or  otherwise. 

Government  employees.  Act  applies  to  civilian  employees  in  the  service  of  the 
Crown,  to  whom  it  would  apply  if  the  employer  were  a  private  person. 

Burden   of  payment.     Entire  cost  of  compensation  rests  upon   employer. 


16  EUKOPEAN  AND  CANADIAN  LAWS:        No.  65 

Compensation  for  death: 

(a)  A  sum  equal  to  three  years'  earnings,  but  not  less  than  $1,000  nor  more 
than  $1,500,  to  those  wholly  dependent  on  earnings  of  deceased. 

(&)  A  sum  less  than  above  amount  if  workman  leaves  persons  partially  depen- 
dent on  his  earnings,  the  amount  to  be  agreed  upon  by  the  parties  or 
to  be  fixed  by  arbitration. 

(c)  Eeasonable  expenses  of  medical  attendance  and  burial  not  exceeding  $100, 
if  deceased  leaves  no  dependants. 

Compensation  for  disability: 

(a)  A  weekly  payment  during  disability  after  second  week,  not  exceeding  50 

per  cent,  of  employee's  average  weekly  earnings  during  the  previous 
twelve  months,  such  weekly  payments  not  to  exceed  $10,  and  total 
liability  not  to  exceed  $1,500. 

(b)  A  weekly  payment  during  partial  disability  after  second  week  to  be  fixed 

with  regard  to  the  difference  between  employee's  average  weekly  earn- 
ings before  the  accident  and  average  weekly  amount  he  is  earning  or 
able  to  earn  after  the  injury. 

(c)  A  lump  sum  may  be  substituted    for    the    weekly    payments,    after    six 

months,  on  the  application  of  the  employer,  the  amount  to  be  settled  in 

default  of  agreement,  by  arbitration  under  the  act. 
Revision  of  compensation.     Weekly  payments  may  be  revised  at  request  of 

either  party. 
Insurance.  Employers  may  contract  with  their  employees  for  the  substitu- 
tion of  a  scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions 
of  the  act  if  the  Attorney-General  certifies  that  the  scheme  is  on  the  whole  not  less 
favourable  to  the  general  body  employees  and  their  dependants  than  the  provis- 
ions of  the  act.  In  such  case  the  employer  is  liable  only  in  accordance  with  this 
scheme. 

Guarantee  of  payment.  When  an  employer  becomes  liable  under  the  act  to  pay 
compensation  and  is  entitled  to  any  sum  from  insurers  on  account  of  the  amount 
due  to  a  workman  under  such  liability,  then  in  the  event  of  the  employer  becoming 
bankrupt,  such  workman  has  a  first  claim  upon  the  amount  so  due,  and  a  judge  of 
the  Supreme  Court  may  direct  the  insurers  to  pay  such  sum  into  any  chartered  bank 
of  Canada  to  be  invested  or  applied  to  payment  of  compensation. 

Settlement  of  disputes.  Disputes  arising  under  the  act  are  settled  by  arbi- 
tration of  existing  committees  representative  of  employers  and  employees,  or  if 
either  party  objects,  by  a  single  arbitrator  agreed  upon  by  the  parties,  or,  in  the 
absence  of  agreement,  by  an  arbitrator  appointed  by  a  judge  of  the  Supreme  Court. 
An  arbitrator  appointed  by  a  judge  of  the  Supreme  Court  has  all  the  power  of  a 
judge  of  the  Supreme  Court.  Questions  of  law  may  be  submitted  by  the  arbitrator 
for  the  decision  of  a  judge  of  the  Supreme  Court. 

Cape  of  Good  Hope. 

Date  of  enactment.    June  6,  1905,  in  effect  September  1,  1905. 

Injuries  compensated.  All  injuries  to  employees  arising  out  of  and  in  the 
course  of  the  employment  causing  death  or  necessitating  absence  from  work  for 
more  than  three  days  and  not  being  caused  by  or  through  the  gross  carelessness 
of  the  injured  employee. 

Industries  covered.  Any  trade,  business,  or  public  undertaking,  on  land  or 
upon  or  within  the  territorial  waters  of  the  colony,  except  domestic,  messenger  or 
errand  service,  or  employment  in  agriculture. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  17 


Persons  compensated.  Employees,  whether  engaged  in  manual  work  or  other- 
wise. 

Government  employees.  Act  applies  to  civilian  persons  employed  by  or  under 
the  Crown  to  whom  it  would  apply* if  employer  were  a  private  person. 

Burden  of  payment.  Employer  and  every  principal  are  jointly  and  severally 
liable  for  the  compensations  required  under  the  act. 

Compensation  for  death: 

When  death  results  from  an  injury  for  which  a  lump  sum  lias  not  already  been 
paid  on  account  of  permanent  disability — 

(a)  A  lump  sum  not  exceeding  three  years'  wages  of  deceased,  nor  more  than 
£400  ($1,946. GO),  to  those  wholly  dependent  upon  the  workman's 
earnings. 

(6)  A  lump  sum  not  exceeding  £200  ($973.30)  to  those  partially  dependent 
upon  the  workman's  earnings ;  in  the  absence  of  persons  totally  depen- 
dent, the  sum  not  to  exceed  the  value  of  the  support  which  they  were 
receiving  from  the  deceased,  calculated  for  two  years. 

(c)  Temporary  payments  previously  made  not  to  be    deducted    from    above 

sums  unless  they  have  continued  longer  than  three  months. 

(d)  Reasonable  expenses  of  medical  attendance  and  burial  not  to  exceed  £40. 

($194.66)   in  case  deceased  leaves  no  dependants- 
Compensation  for  disability: 

(a)  A  sum  not  exceeding  three  years'  wages,  less  any  payments  received  under 

a  provisional  order  of  court,  but  not  exceeding  £600  ($2,919.90)  in  case 
of  permanent  total  disability,  and  a  smaller  sum  in  proportion  to  loss 
of  earning  power  and  not  exceeding  £300  ($1,459.95)  in  case  of  per- 
manent partial  disability. 

(b)  A  payment  made,  by  order  of  the  local  magistrate  at  the  same  intervals 

as  the  customary  wage  payments,  not  exceeding  50  per  cent  of  wages 
received  at  time  of  the  injury,  nor  £2  ($9.73)  per  week,  if  the  injury 
causes  temporary  disability  lasting  more  than  three  days. 
Revision  of  compensation.     The  provisional  order  may  be  set  aside  or  altered 
by  the  magistrate,  upon  request  of  either  party,  if  justified  by  a  further  examina- 
tion of  the  injured  person  or  by  production  of  additional  evidence. 

Insurance.  Employers  may  insure  in  a  company  or  association  against  per- 
sonal injury  to  the  workmen  employed  by  them  or  in  their  behalf.  If  the  employer 
contributes  toward  a  benefit  society  of  which  the  injured  or  deceased  person  is  a 
member,  allowance  is  made  for  such  contribution  by  the  court  in  its  order  or  judg- 
ment fixing  amount  of  compensation  to  be  paid. 

Guarantee  of  payment.  When  an  employee  or  principal  is  adjudged  or  admits 
liability  under  the  act  and  is  entitled  to  any  sum  from  any  insurers  on  account 
of  such  liability,  then,  in  the  event  the  employer  becomes  insolvent,  the  worker 
or  his;  dependants  have  a  first  claim  upon  such  sum. 

.Settlement  of  disputes.  Compensation  in  cases  of  disability  is  fixed  provis- 
ionally for  not  more  than  six  months  by  the  local  magistrate  after  receiving  a 
physician's  certificate  of  disability  and  holding  an  inquiry.  No  appeal  can  be 
taken  from  this  preliminary  order  except  against  a  finding  on  the  question  of  gro«s 
carelessness,  and  then  only  upon  leave  granted  by  the  Superior  Court.  In  case  the 
injury  results  in  death  or  permanent  disability,  the  claimants  have  a  right  of 
action  in  the  local  magistrate's  court  for  the  amounts  due  under  the  law.  In 
fixing  the  amount,  the  court  is  required  in  every  case  to  have  regard  to  the  work- 
man's or  the  dependant's  necessities. 
2  L. 


18  EUEOPEAN  AND  CANADIAN  LAWS:  No.  65 


Denmark. 

Date  of  enactment.  January  7,  1898,  in  effect  January  15,  1899;  amended 
May  15,  1903. 

Injuries  compensated.  All  injuries  by  accident  occasioned  by  the  trade  or 
its  conditions,  and  causing  either  death  or  disability  lasting  over  thirteen  weeks, 
unless  brought  on  intentionally  or  through  gross  negligence  of  the  victim. 

Industries  covered.  Practically  all  establishments  in  mining,  quarrying,  man- 
ufactures, building  and  engineering  work,  transportation,  telephone  and  telegraph 
service,  diving  and  salvage;  establishments  using  mechanical  power  which  makes 
them  subject  to  factory  inspection:  other  industrial  establishments  designated  by 
the  minister  of  the  interior. 

Persons  compensated.  All  workmen  in  mechanical  and  technical  departments, 
including  those  in  a  supervisory  capacity  whose  annual  earnings  do  not  exceed  2,400 
crowns  ($643.20). 

Government  employees.  Act  applies  to  all  employees  of  state  and  communal 
governments  in  industries  above  indicated. 

Burden  of  payment.     Entire  burden  of  payment  rests  upon  employer. 

Compensation  for  death: 

(a)   Funeral  benefit  of  50  crowns  ($13.40). 

(&)  A  lump  sum  equal  to  four  times  annual  earnings  of  deceased,  but  not 
over  3,200  crowns  ($857.60)  nor  less  than  1,200  crowns  ($321.60),  to 
widow  whole  amount  if  she  survives.  Child,  whole  amount  if  it  be  the 
only  heir.  Children,  according  to  decision  of  insurance  council,  when 
there  is  no  widow.  If  neither  widow  nor  children,  insurance  council 
decides  whether  and  how  far  other  heirs  receive  compensation. 

Compensation  for  disability: 

(a)  From  end  of  thirteenth  week  after  accident  until  end  of  treatment,  or 

until  disability  is  declared  permanent,  a  daily  compensation  of  60  per 
cent  of  earnings,  but  not  less  than  1  crown  (27  cents)  nor  over 
2  crowns  (54  cents)  for  total  disability  and  a  proportionate  compensa- 
tion for  partial  disability. 

(b)  In  case  of  permanent  disability  and  indemnity  of  six  times  annual  earn- 

ings, but  not  less  than  1,800  crowns  ($482.40^  nor  over  4,800  crowns 
($1,286.40)  for  total  permanent  disability,  and  proportionate  pay- 
ments for  partial  permanent  disability. 

(c)  If  employee  suffering  from  permanent  disability  is  a  male  between   30 

and  55  years  of  age,  he  may  demand  purchase  of  an  annuity.  For  men 
of  otber  ages,  or  of  unsound  mind,  or  women  and  children,  the  insur- 
ance council  may  substitute  an  annuity. 

Revisior)  of  compensation.  Determination  of  degree  of  permanent  disability 
must  be  made  as  soon  as  possible  after  one  year  from  date  of  injury.  If  this  be 
not  possible,  a  temporary  determination  may  be  made,  but  a  redetermination  may 
be  demanded  within  two  years  following. 

Insurance.  Employers  may  transfer  obligation  imposed  by  the  law,  by  insur- 
ing their  employees  in  authorized  insurance  companies  or  mutual  employers'  insur- 
ance associations. 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  19 

Guarantee  of  payment.  Where  liability  under  the  law  has  not  been  transferred 
by  insurance,  indemnity  for  disability  is  a  preferred  claim  upon  a<>ets  of  employer. 

Settlement  of  disputes.  Disputes  concerning  compensation,  unless  settled  by 
mutual  consent,  must  be  referred  to  insurance  council.  Appeals  may  be  bad  to  the 
Minister  of  the  Interior. 


Finland. 

Date  of  enactment.     December  5,  1895,  in  effect  January  1,  1898. 

Injuries  compensated.  All  injuries  by  accident  during  work,  causing  death 
or  disability  for  more  than  six  days,  except  when  brought  on  intentionally  or 
through  gross  negligence  of  the  workman,  intentionally  by  any  other  person  than 
the  one  charged  with  supervision  of  the  work,  or  caused  by  some  other  occurrence 
utterly  independent  of  the  nature  or  conditions  of  work. 

Industries  covered.  Pits,  mines,  quarries,  metallurgical  establishments,  fac- 
tories, sawmills,  industrial  establishments  using  mechanical  power,  breweries,  dis- 
tilleries, construction  of  churches  and  buildings  over  one  story  high;  construction 
and  operation  of  water,  gas,  electric  power  plants,  and  operation  of  railroads. 

Persons  compensated.  All  persons  actually  employed  at  work,  but  not  those 
who  merely  supervise  the  work. 

Government  employees.  Act  applies  to  employment  on  the  state  and  com- 
munal construction  works  and  state  railways. 

Burden  of  payment.     Entire  burden  of  payment  rests  upon  employer. 

Cornpensation  for  death.  In  addition  to  any  prior  payments  on  account  of 
disability,  pensions  to  dependent  heirs,  from  day  of  death,  not  exceeding  40  per 
cent,  of  annual  earnings  of  deceased,  to — 

(a)  "Widow,  20  per  cent.,  until  death  or  remarriage;  in  latter  case  a  final  sum 

equal  to  two  annual  payments. 

(b)  Each  child  until  the  age  of  15  years,  10  per  cent.,  if  one  parent  survives, 

and  20  per  cent,  if  neither  parent  survives, 
(r)    In  computing  pension,  earnings  of  workmen   to  be  considered   not  over 
700  marks  ($138.96),  nor  under  300  marks  ($57.90)  ;  but  no  adult  em- 
ployee to  receive  a  pension  greater  than  his  actual  earnings. 

Compensation  for  disability: 

(a)  A  pension  equal  to  60  per  cent,  of  employee's  earnings  for  total  disabil- 
ity, or  a  pension  proportionate  to  the  degree  of  incapacity  for  partial 
disability,  to  be  paid  from  day  of  recovery  from  illness  due  to  injury, 
or  after  120  days  have  elapsed  since  injury. 

(6)  Pension  may  by  mutual  consent  be  replaced  by  single  payment,  if  it  does 
not  exceed  20  marks   ($3.86)   annually. 

(c)  In  computing  pension,  earnings  of  workman   to  be  considered   not  over 

720  marks  ($138.96)  nor  under  300  marks  ($57.90)  ;  but  no  adult 
employee  to  receive  a  pension  greater  than   his  actual  earnings. 

(d)  In  cases  of  temporary  disability  (including  all  cases  of  disability  for  120 

days  after  injury),  daily  compensation  of  60  per  cent,  of  earnings,  be- 
ginning with  seventh  day  after  accident,  for  complete  temporary  dis- 
ability, and  proportionate  compensation  for  partial  disability:  but  not 
more  than  2.50  marks   (48  cents)   per  diem. 


20  EUROPEAN  AND  CANADIAN  LAWS:  No.  65 

(e)  Until  recovery,  injured  employee  may  be  given  treatment  in  a  hospital  in 
lieu  of  other  compensation;  during  such  treatment  his  wife  and  chil- 
dren get  a  compensation  equal  to  pension  in  case  of  death. 

Revision  of  compensation.  Demands  for  revision  of  compensation  may  be 
made  by  either  party  before  proper  court. 

Insurance.  Employers  are  required  to  transfer  the  burden  of  payment  of 
compensation  to  a  governmental  insurance  office,  private  insurance  company, 
mutual  employers'  insurance  association,  or  approved  foreign  insurance  company, 
unless  unable  to  obtain  such  insurance  or  released  from  this  obligation  on  presenta- 
tion of  satisfactory  guarantees. 

Guarantee  of  payment.  When  exempted  from  the  duty  of  insuring  his  em- 
ployees, or  unable  to  obtain  insurance,  the  employer  must  guarantee  payment  of 
pension  to  the  injured  workman  or  his  family  by  arrangement  with  a  private  in- 
surance company. 

Settlement  of  disputes.  In  case  of  absence  of  insurance  or  dissatisfaction 
with  decision  of  insurance  company,  injured  employee  or  his  dependant  may  carry 
the  case  into  the  inferior  court  of  the  locality. 

France. 

Date  of  enactment.  April  9,  1898,  in  effect  July  1,  1899 ;  amendatory  and 
supplementary  acts  March  22,  1902,  March  31,  1905,  April  12,  1906,  and  July  17, 
1907. 

Injuries  compensated.  All  injuries  by  accident  to  workmen  or  salaried 
employees  during  or  on  account  of  labour  causing  death  or  disability  for  five  or 
more  days,  unless  produced  intentionally  by  the  victim.  If  due  fo  inexcusable  fault 
of  victim  or  of  employer,  compensation  may  by  a  court  order  be  decreased  or  in- 
creased, but  not  exceeding  actual  earnings  of  victim. 

Industries  covered.  Building  trades,  factories,  workshops,  shipyards,  trans- 
portation by  land  and  water,  public  warehouses,  mining  and  quarrying,  manufac- 
ture or  handling  of  explosives,  agriculture  and  other  work  using  mechanical  power, 
and  mercantile  establishments;  other  industries  on  request  of  both  parties. 

Persons  compensated.    All  workmen  and  salaried  employees. 

Government  employees.  Law  applies  to  state,  departmental  and  communal 
establishments  when  engaged  in  industries  enumerated  above. 

Burden  of  payment.    Entire  cost  of  compensation  falls  upon  employer. 

Compensation  for  death: 

(a)   Funeral  expenses  not  exceeding  100  francs  ($19.30). 
(&)  Pensions  to  dependent  heirs  not  exceeding  60  per  cent  of  annual  wages 
of  deceased,  distributed  to — 
Widow  or  widower,  20  per  cent,  until  death  or  remarriage,  in  which  latter 

case  a  final  sum  equal  to  three  annual  payments. 
Children  under  16  years  of  age,  if  one  parent  survives,  15  per  «ent.  if  there 
is  but  one  child;  25  per  cent,  if  there  are  two  children;  35  per  cent, 
if  there  are  three  children  ;  40  per  cent,  if  there  are  four  or  more  chil- 
dren. 
Each  child  under  16  years  of  age,  if  neither  parent  survives,  20  per  cent. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  21 

Each  ascendant  and  each  descendant  under  16  years  of  age  dependent  upon 
deceased,  if  no  widow  or  children  survive,  10  per  cent.,  the  aggregate 
not  to  exceed  30  per  cent. 
(c)   If  annual  wages  exceed  2,400  francs   ($463.20),  only  one-fourth  of  the 
excess  is  considered  in  computing  pensions. 

Compensation  for  disability: 

(a)  Expenses  of  medical  or  surgical  treatment. 

(b)  If  permanently  disabled,  a  pension  of  66  2-3  per  cent,  of  annual  wages  for 

total  disability,  and  of  one-half  loss  of  earning  capacity  for  partial  dis- 
ability; or,  if  demanded,  one-fourth  the  capital  value  of  pension  in 
cash,  the  pension  to  be  reduced  accordingly. 

(c)  If  temporarily  disabled,  an  allowance  of  50  per  cent  of  daily  wages,  begin- 

ning with  fifth  day,  and  including  Sundays  and  holidays,  unless  dis- 
ability lasts  more  than  ten  days,  when  payments  become  due  from  the 
first  day. 

(d)  If  annual  wages  exceed  2,400  francs    ($463.20),  only  one-fourth  of  the 

excess  is  considered  in  computing  pensions. 

(e)  Payments  of  pensions  of  not  over  100  francs  ($19.30)  per  annum,  may, 

by  mutual  consent  when  beneficiary  is  of  age,  be  replaced  by  a  cash 
payment. 

Revision  of  compensation.  Revision  of  compensation  because  of  aggravation 
or  diminution  of  disability  of  victim  may  be  made  within  three  years. 

Insurance.  Employers  may  transfer  burden  of  payment  of  compensation  to 
approved  mutual  aid,  accident  insurance,  or  guaranty  associations,  or  in  case  of 
pensions,  to  national  accident  insurance  or  national  old-age  pension  funds. 

Guarantee  of  payment.  '  The  State  guarantees  against  loss  of  pension  payments 
on  account  of  insolvency  of  employers  or  insurance  organizations,  and  is  reim- 
bursed by  a  special  tax  on  employers  within  scope  of  the  act.  For  temporary  dis- 
ability payments,  medicines  and  medical  or  surgical  attendance,  and  funeral 
expenses  the  victim,  his  creditors,  or  representatives  have  a  preferred  claim  on 
property  of  employer. 

Settlement  of  disputes.  Disputes  as  to  pensions  involving  more  than  300 
francs  ($57.90)  may  be  carried  into  higher  civil  courts,  judgment  of  local  justice 
of  the  peace  is  final  in  other  cases. 

Germany. 

Date  of  enactment.  July  6,  1884,  in  effect  October  1,  1885.  Supplementary 
Acts  of  May  28,  1885,  May  5,  1886,  July  11  and  13,  1887.  A  codification  enacted 
June,  30,  1900;  July  19.  1911. 

Injuries  compensated.  Injuries  by  accident  in  the  course  of  the  employment, 
causing  death  or  disability  for  more  than  three  days,  unless  caused  intentionally. 
Compensation  may  be  refused  or  reduced  if  injury  was  received  while  committing 
an  illegal  act. 

Industries  covered.  Mining,  salt  works,  quarrying  and  allied  industries,  ship- 
yards, factories,  smelting  works,  building  trades,  chimney  sweeping,  window  clean- 
ing, butchering,  transportation  and  handling  agriculture,  forestry,  and  fisheries. 

Persons  compensated.  All  workmen,  and  those  technical  officials  whose  annual 
earnings  are  less  than  3,000  marks  ($714).  With  the  approval  of  the  Imperial 
Insurance  Office,  the  law  may  be  extended  to  other  classes. 


22  EUROPEAN  AND  CANADIAN  LAWS:      ■  No.  65 

Government  employees.  Act  covers  government  employees  in  postal,  telegraph, 
and  railway  services  and  in  industrial  enterprises  of  army  and  navy,  unless  other- 
wise provided  for. 

Burden  of  payment.  Medical  and  surgical  treatment  for  ninety-one  days  and 
benefit  payments  from  third  to  ninety-first  days  are  provided  by  sick-benefit  funds 
to  which  employers  contribute  one-third  and  employees  two-thirds;  from  twenty- 
eighth  to  ninety-first  day  payments  are  increased  by  one-third  at  expense  of 
employer  in  whose  establishment  accident  occurred;  after  ninety- first  day,  and  in 
case  of  death  from  injuries,  expense  is  borne  by  employers'  associations  supported 
by  contribution's  of  employers. 

Compensation  for  death: 

(a)  Funeral  benefits  of  one-fifteenth  of  annual  earnings  of  deceased,  but  not 

less  than  50  marks  ($11.90). 

(b)  Pensions  to  dependent  heirs  not  exceeding  60  per  cent,  of  annual  earn- 

ings of  the  deceased,  as  follows:  widow,  20  per  cent  of  annual  earnings 
until  death  or  remarriage,  in  latter  case  a  final  sum  equal  to  three 
annual  payments;  dependent  widower,  20  per  cent  of  annual  earnings; 
each  child  15  years  of  age  or  under,  20  per  cent.;  payments  to  consort 
and  children  to  be  reduced  proportionately  if  the  total  would  exceed 
60  per  cent ;  dependent  heirs  in  ascending  line,  20  per  cent,  or  less,  if 
there  is  a  residue  after  providing  for  above  heirs;  orphan  grandchil- 
dren, 20  per  cent,  or  less,  if  there  is  a  residue  after  providing  for  above 
heirs. 

(c)  If  annual  earnings  exceed  1,500  marks   ($357)   only  one-third  of  excess 

is  considered  in  computing  pensions. 
Compensation  for  disability: 

(a)  Free  medical  and  surgical  treatment  paid  first  thirteen  weeks  by  sick- 

benefit  funds,  and  afterwards  by  employers'  associations. 

(b)  For  temporary  or  permanent  total  disability,  50  per  cent,  of  daily  wages 

of  persons  similarly  employed,  but  not  exceeding  3  marks  (71  cents), 
paid  by  sick-benefit  funds  from  third  day  to  end  of  fourth  week :  from 
fifth  to  end  of  thirteenth  week,  above  allowance  by  sick-benefit  funds, 
plus  16  2-3  per  cent,  contributed  by  employer  direct;  after  13  weeks, 
66  2-3  per  cent,  of  average  annual  earnings  of  injured  person  paid  by 
employers'  association. 

(c)  For  complete  helplessness,  necessitating  attendance,    payments    may    be 

increased  to  100  per  cent,  of  annual  earnings. 

(d)  For  partial  disability,  a  corresponding  reduction  in  payments. 

(e)  If  annual  earnings  exceed  1,500  marks  ($357),  only  one-third  of  excess 

is  considered  in  computing  pensions. 

Revision  of  compensation.  Whenever  a  change  in  condition  of  injured  person 
occurs  a  revision  of  benefits  may  be  made. 

Insurance.  Payments  are  met  by  mutual  insurance  associations  of  employers, 
in  which  all  employees  are  required  to  be  insured  at  the  expense  of  employers. 
Separate  associations  have  been  organized  for  each  industry. 

Guarantee,  of  payment.  Solvency  of  employers'  associations  is  guaranteed 
by  the  State. 

Settlement  of  disputes.  Disputes  are  settled  by  "arbitration  courts  for  work- 
men's insurance,"  composed  of  one  government  official,  two  representatives  of 
workmen,  and  two  of  employers- 


1912  WOKKMK.VS  COMPENSATION   COMMISSION.  23 


Great  Britain. 

Date  of  enactment.  December  21,  1906,  in  effect  July  1,  1907,  replacing  Acts 
of  August  6,  1897,  and  July  30,  1900. 

Injuries  compensated.  Injuries  by  accident  arising  out  of  and  in  the  course 
of  the  employment  which  cause  or  disable  a  workman  for  at  least  one  week  from 
earning  full  wages  at  the  work  at  which  he  was  employed.  Compensation  is  not 
paid  when  injury  was  due  to  serious  and  wilful  misconduct,  unless  it  results  in 
death  or  serious  and  permanent  disablement. 

Industries  covered.    "Any  employment." 

Persons  compensated.  Any  person  regularly  employed  for  the  purposes  of  the 
employers  trade  or  business  whose  compensation  is  less  than  £250  ($1,216.63)  per 
annum;  but  persons  engaged  in  manual  labor  only  are  not  subject  to  this  limitation. 

Government  employees.  Act  applies  to  civilian  persons  employed  under  the 
Crown  to  whom  it  would  apply  if  the  employer  were  a  private  person. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death: 

(a)  A  sum  equal  to  three  years'  earnings,  but  not  less  than  £150  ($729.98) 
nor  more  than  £300  ($1,459.95),  to  those  entirely  dependent  on  earn- 
ings of  deceased. 

(&)   A  sum  less  than  above    amount    if    deceased    leaves    persons    partially 
dependent  on  his  earnings,  amount  to  be  agreed  upon  by  the  parties 
fixed  by  arbitration. 

(c)  Reasonable  expenses  of  medical  attendance  and  burial,  but  not  to  exceed 
£10  ($48.67)  if  deceased  leaves  no  dependants. 

Compensation  for  disability: 

(a)  A  weekly  payment  during  incapacity  of  not  more  than  50  per  cent,  of 

workman's  average  weekly  earnings  during  previous  twelve  months, 
but  not  exceeding  £1  ($4.87)  per  week;  if  incapacity  lasts  less  than 
two  weeks  no  payment  is  required  for  the  first  week. 

(b)  A  weekly  payment  during  partial  disability,  not  exceeding  the  difference 

between  workman's  average  weekly  earnings  lief  ore  injury  and  average 
amount  which  he  is  earning  or  is  able  to  earn  after  injury. 

(c)  Minor  persons  may  be  allowed    full    earnings    during    incapacity,    but 

weekly  payments  may  not  exceed  10  shillings   ($2.43). 

(d)  A  sum  sufficient  to  purchase  a  life  annuity  through  the  Post  Office  Sav- 

ings Bank  of  75  per  cent,  of  annual  value  of  weekly  payments  may  be 
substituted,  on  application  of  the  employer,  for  weekly  payments  after 
six  months;  but  other  arrangements  for  redemption  of  weekly  pay- 
ments may  be  made  by  agreement  between  employer  and  workman. 
Revision  of  compensation.  Weekly  payments  may  be  revised  at  request  of 
either  party,  under  regulations  issued  by  the  Secretary  of  State. 

Insurance.  Employers  may  make  contracts  with  workmen  for  substitution  of 
a  scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions  of  the 
act,  if  the  registrar  of  friendly  societies  certifies  that  the  scheme  is  not  less  favor- 
able to  the  workmen  and  their  dependants  than  the  provisions  of  the  act,  and  that 
a  majority  of  the  workmen  are  favourable  to  the  substitute.  The  employer  is  then 
liable  only  in  accordance  with  the  provisions  of  the  scheme. 

Guarantee  of  payment.  In  case  of  employer's  bankruptcy,  the  amount  of  com- 
pensation  due  under  the  act,   up   to   £100    ($486.65)    in   any  individual   case,  is 


24:  EUROPEAN  AND  CANADIAN  LAWS:        No.  65 


classed  as  a  preferred  claim;  or  where  an  employer  lias  entered  into  a  contract 
which  insures  in  respect  of  any  liability  under  the  act  to  any  workman,  such  rights 
of  the  employer,  in  case  he  becomes  bankrupt,  are  transferred  to  and  vested  in  the 
workman. 

Settlement  of  disputes.  Questions  arising  under  the  law  are  settled  either  by 
a  committee  representative  of  the  employer  and  his  workmen,  by  an  arbitrator 
selected  by  the  two  parties,  or  if  the  parties  can  not  agree,  by  the  judge  of  the 
county  court,  who  may  appoint  an  arbitrator  to  act  in  his  place. 

Greece. 

Date  of  enactment.  February  21,  (March  6),  1901,  in  effect  (retroactively) 
December  20,  1900,   (January  2,  1901). 

Injuries  compensated.  All  injuries  by  accident  during  or  because  of  the 
employment,  and  causing  death  or  disability  lasting  more  than  four  days,  unless 
brought  on  intentionally  by  the  injured  person. 

Industries  covered.     Mines,  quarries,  and  metallurgical  establishments. 

Persons  compensated.    All  workmen  and  subordinate  salaried  persons. 

Government  employees.  No  mention  of  government  employees  is  made  in 
the  law. 

Burden  of  payment.  Employer  carries  full  burden  of  payment  of  indemni- 
ties during  first  three  months;  after  three  months  half  payments  of  pensions  are 
contributed  by  the  miners'  fund,  which  is  mainly  supported  by  a  tax  on  the  mines 
and  metallurgical  establishments,  but  partly  by  contributions  from  the  workmen's 
mutual  aid  societies  in  these  establishments  and  some  minor  sources. 

Compensation  for  death: 

(a)  If  death  occurs  immediately  or  within  three  months;    (1)    Euneral  ex- 

penses amounting  to  60  drachmas  ($11.58)  ;  (2)  Pensions  to  heirs 
aggregating  pension  paid  for  total  disability. 

(b)  If  death  occurs  three  months   after   injury  or  later,  pensions   to   heirs 

aggregating  75  per  cent,  of  pension  paid  during  life  of  the  injured. 

(c)  All  pensions  to  heirs  are  distributed  as  follows:     Equal  share  to  widow 

and  children,  or,  in  absence  of  widow  and  children  equal  share  to 
father  and  mother. 

(d)  Pension  to  widow  ceases  on  her  remarriage;  to  male  children  at  16  years 

of  age;  to  female  children  on  their  marriage,  with  payment  of  one 
year's  pension  as  a  dowry. 

(e)  If  only  one  heir  survives  he  is  entitled  to  only  one-half  of  original  pension. 

Compensation  for  disability: 

(a)   Free  medical  and  surgical  treatment. 

(&)   An  allowance  of  50  per  cent,  of  earnings  of  injured  employee  during  first 
three  months. 

(c)  Tf  permanently  disabled,  a  pension  of  50  per  cent,  of  earnings  in 'case  of 

total  disability  (including  loss  of  a  band  or  foot);  in  case  of  partial 
disability,  a  pension  of  33  1-3  per  cent,  of  earnings,  pension  payments 
to  begin  after  end  of  third  month. 

(d)  Tension  may  not  exceed  100  drachmas  ($19.30)  per  month,  plus  25  per 

cenl.  of  the  excess  of  computed  pension  over  100  drachmas  ($19.30). 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  25 


(e)  In  computing  pension  of  apprentices  and  children,  no  wage  is  to  be  con- 
sidered less  than  2.50  drachmas  (48  cents)  per  day. 

Revision  of  compensation.  Injured  employees  may  present  a  new  petition,  or 
the  council  of  the  miners'  fund  may  order  a  new  examination,  whenever  there  is 
reason  to  believe  that  changes  have  occurred  in  the  degree  of  disability. 

Insurance.  No  provision  is  made  by  the  law  for  the  transfer  of  the  burden  of 
payment  of  compensation  by  insurance. 

Gurantee  of  payment.  The  miners'  fund  guarantees  payment  of  pensions  and 
other  allowances,  and  has  preferred  claim  upon  employer's  assets  in  cases  of  disso- 
lution or  forced  sale  of  establishments,  and  also  in  case  of  voluntary  transfer,  unless 
the  new  proprietor  assumes  the  obligations  under  the  law. 

Settlement  of  disputes.  Amount  of  pension  is  settled  by  the  council  of  the 
miners'  fund,  and  appeals  against  its  decisions  may  be  carried  into  the  ordinary 
courts. 

Holland. 

Date  of  enactment.  January  2,  1901,  in  effect  June  1,  1901.  Other  acts  Feb- 
ruary 3,  and  December  8,  1902,  and  July  24,  1903. 

Injuries  compensated.  All  injuries  caused  by  accident  in  the  course  of  the 
employment  and  causing  death  or  disability  for  over  two  days,  unless  brought  on 
intentionally.  If  due  to  intoxication,  compensation  is  reduced  one-half;  and  if 
death  results  no  compensation  is  paid. 

Industries  covered.  Practically  all  manufacturing,  mining,  quarrying,  build- 
ing, engineering  construction,  and  transportation;  fishing  in  internal  waters,  estab- 
lishments using  mechanical  motive  power,  or  explosive  or  inflammable  materials, 
and  mercantile  establishments  handling  such  materials. 

Persons  compensated.     All  workmen,  including  apprentices. 

Government  employees.  All  State,  provincial,  and  communal  employees  are 
included  when  engaged  in  any  of  the  industries  enumerated. 

Burden  of  payment.     The  entire  expense  rests  upon  the  employer. 

Compensation  for  death: 

(a)  Funeral  benefit  of  thirty  times  average  daily  earnings  of  deceased. 

(b)  Pensions  to  heirs  of  not  over  60  per  cent,  of  earnings  of  deceased,  dis- 

tributed to — 

"Widow,  30  per  cent,  of  earnings,  until  death  or  remarriage,  in  latter 
case  two  years' payments  as  a  settlement  ;  or  to  dependent  widower, 
a  pension  equal  to  cost  of  support,  but  not  over  30  per  cent,  of 
earnings  of  deceased. 

Each  child  under  16  years  of  age,  15  per  cent,  if  one  parent  survives, 
and  20  per  cent,  if  both  are  dead. 

Dependent  parents,  and  in  their  absence  to  -rand parents,  not  over  30 
per  cent. 

Orphan  grandchildren,  not  over  20  per  cent. 

Dependent  parents-in-law,  not  over  30  per  cent. 

Widow  and  children  to  be  preferred  over  all  other  heirs,  and  their  re- 
spective shares  to  be  reduced  proportionately  when  aggregating 
over  60  per  cent. 

(c)  In  computing  pensions,  wages  higher  than  4  florins   ($1.61)   per  day  are 

to  be  considered  as  of  that  amount. 


26  EUROPEAN  AND  CANADIAN  LAWS:        No.  65 


Compensation  for  disability: 

(a)  Free  medical  and  surgical  treatment,  or  its  cost. 

(b)  From  day  after  injury  until  forty-third  day,  an  allowance  of  70  per  cent. 

of  daily  earnings,  excluding  Sundays  and  holidays. 

(c)  From  forty-third  day  a  pension  of  above  amount  during  total  disability 

and  a  smaller  pension  in  proportion  to  loss  of  earning  power  if  par- 
tially disabled. 

(d)  In  computing  pensions,  wages  higher  than  4  florins    ($1.61)    per  day 

are  to  be  considered  as  of  that  amount. 

Revision  of  compensation.  An  examination  of  condition  of  victim  may  be 
made  whenever  the  Eoyal  Insurance  Bank  so  desires. 

Insurance.  Employers  may  insure  their  employees  in  the  Royal  Insurance 
Bank  (a  State  institution),  in  a  private,  company  or  association  operating  under 
State  supervision,  or  they  may  carry  the  burden  themselves.  If  not  insured  in  the 
Royal  Insurance  Bank  a  sufficient  guarantee  must  be  deposited  with  the  latter. 
Employers  must  bear  a  proportionate  share  of  the  expense  of  administration  of 
the  Royal  Insurance  Bank,  whether  they  insure  in  it  or  not. 

Guarantee  of  payment.     Compensation  payments  are  guaranteed  by  the  State. 

Settlement  of  disputes.  Appeals  may  be  taken  from  decisions  of  the  Royal 
Insurance  Bank  to  local  arbitration  councils,  in  which  employers  and  emploj^ees  are 
equally  represented,  and  from  them  to  a  central  arbitration  council  whose  decisions 
are  final. 

Hungary. 

Date  of  enactment.    April  9,  1907,  in  effect  July  1,  1907. 
Injuries  compensated.     Injuries  by  accident  in  the  course  of  the  employment 
causing  death  or  disability  for  more  than  three  days.     Injuries  caused  intentionally 
are  not  compensated  unless  fatal. 

Industries  covered.    All  factories  subject  to  inspection,  mines,  quarries,  metal- 
lurgical establishments,  building  trades,  lumbering,  construction  work,  shipbuild- 
ing, slaughter  houses,  pharmacies,  sanatoria,  theatres,  institutes  of  art  and  science- 
Persons  compensated.    All  employees  in  industries  enumerated. 
Government  employees.     Act  covers  government  employees  in  state,  municipal, 
and  communal  industries  enumerated  above. 

Burden  of  payment.  All  benefits  and  cost  of  treatment  for  first  ten  weeks  pro- 
vided by  sick  funds  to  which  employers  and  employees  contribute  equally.  Begin- 
ning with  eleventh  week,  entire  cost  is  defrayed  by  employers  through  the  accident 
fund. 

Compensation  for  death: 

(a)  Funeral  benefit  of  twenty  times  average  daily  wages. 

(b)  Pensions  to  heirs  not  exceeding  60  per  cent  of  annual  earnings  of  deceased, 

as  follows:  Widow,  20  per  cent,  of  annual  earnings  until  death  or 
remarriage;  in  latter  case  a  final  sum  equal  to  60  per  cent,  of  annual 
earnings;  or  to  dependent  widower  20  per  cent,  during  disability. 

Each  child  16  years  of  age  or  under,  15  per  cent.,  if  one  parent  survives,  30 
per  cent.,  if  neither  survives ;  payments  to  consort  and  children  reduced 
proportionately  if  they  aggregate  more  than  60  per  cent. 

Dependent  parents  and  grandparents,  if  there  is  a  residue  after  providing 
for  above  heirs,  20  per  cent,  or  less. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  27 

Dependent  orphan  grandchildren  15  years  of  age  or  under,  if  there  is  a  resi- 
due after  providing  for  above  heirs,  20  per  cent,  or  less. 
(c)  In  computing  pensions  the  excess  of  annual  earnings  above  2,400  crowns 
($487.20)  is  not  considered. 

Compensation  for  disability: 

(a)  Free  medical  and  surgical  treatment  provided  firsl  ten  weeks  by  sick  fund, 

and  afterward  by  accident  fund. 

(b)  For  temporary  or  permanent  total  disability.  50  per  cent,  of  average  daily 

wages,  but  not  exceeding  4  crowns  (81  cents)  for  first  ten  weeks,  pro- 
vided by  sick  fund;  beginning  with  eleventh  week.  GO  per  cent  of  aver- 
age annual  earnings,  provided  by  accident  fund. 

(c)  For  complete  helplessness    necessitating    attendance    payments    may    be 

increased  to  100  per  cent,  of  annual  earnings. 

(d)  For  partial  disability  a  corresponding  portion  of  full  pension. 

(e)  In  computing  pensions  the  excess  of  annual  earnings  above  2,400  crowns 

($487.20)  is  not  considered. 

Revision  of  compensation.  Whenever  a  change  in  condition  of  injured  per- 
son occurs,  the  accident  fund  or  the  injured  person  may  ask  for  a  revision  of  the 
benefits. 

Insurance.  Payments  are  met  by  a  State  insurance  institution,  in  which  all 
employees  are  required  to  be  insured  at  the  expense  of  the  employers. 

Guarantee  of  payment.     Guaranteed  by  the  State. 

Settlement  of  disputes.  Disputes  are  settled  by  arbitration  courts,  consisting 
of  a  presiding  judge  and  an  equal  number  of  representatives  of  workmen  and 
employers. 

Italy. 

Date  of  enactment.  March  17,  1898,  in  effect  September  17,  1898.  Amended 
June  29,  1903.    Promulgated  in  codified  form  January  31,  1904. 

Injuries  compensated.  All  injuries  sustained  by  workmen  or  salaried 
employees  during  or  on  account  of  labor.  If  due  to  wilful  misconduct,  employer 
may  be  reimbursed  through  criminal  action. 

Industries  covered.  Mines,  quarries,  building  trades;  light,  heat  and  power 
plants,  arsenals,  maritime  construction  work,  transportation,  industries  requiring 
the  use  or  handling  of  explosives,  all  industrial  or  agricultural  work  in  proximity 
to  power  machinery;  where  more  than  five  persons  are  employed  in  engineering 
construction  work;  operation  for  protection  against  landslides,  floods,  hailstorms; 
logging  and  timber  rafting,  and  shipbuilding. 

Persons  compensated.  All  workmen  and  apprentices  and  overseers  receiving 
not  more  than  7  lire  ($1.35)  per  day  and  paid  at  intervals  of  one  month  or  less. 

Government  employees.  Act  applies  to  employment  in  state,  provincial,  and 
communal  industries  enumerated  above  unless  specially  provided  for,  and  to  work 
performed  for  a  government  institution  under  contract  or  concession. 

Burden  of  payment.    Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death : 

If  within  two  years  after  the  accident,  five  times  annual  wages  of  deceased 
workman,   with   a  maximum  of  10,000   lire    ($1,930),   distributed   to: 

(a)  Surviving  consort  two-fifths  of  indemnity  if  there  are  children;  one-half 
of  indemnity  if  there  are  dependent  ascendants :  three-fifths  of  indem- 


28  EUROPEAN  AND  CANADIAN  LAWS:        No.  65 

nity  if  only  dependent  brothers  or  sisters;  entire  indemnity  in  absence 
of  heirs  enumerated.  Children,  amounts  sufficient  to  purchase  an  an- 
nuity of  equal  amount  for  each  child  under  12  years  of  age,  and  one- 
half  of  such  annuity  for  each  child  from  12  to  18  years  of  age.  Each 
dependent  parent  or  grandparent,  if  there  are  no  children,  annuity  of 
equal  amount  for  life.  Dependent  brothers  or  sisters  less  than  18 
years  of  age,  or  incapable  of  performing  labour  by  reason  of  a  mental 
or  physical  defect,  if  there  are  no  children  or  dependent  ascendants, 
annuities  distributed  upon  same  principle  as  in  case  of  children. 
(b)  In  absence  of  heirs  indemnity  is  turned  into  a  special  fund  for  immediate 
aid  to  injured,  payment  of  indemnities  for  insolvent  employers  and 
prevention  of  accidents. 

Compensation  for  disability: 

(a)  Cost  of  first  medical  and  surgical  treatment. 

(b)  An  indemnity  in  case  of  permanent  disability  of  six  times  annual  earn- 

ings, but  not  less  than  3,000  lire  ($579)  if  totally  disabled,  and  six 
times  the  loss  of  annual  earning  capacity  if  partially  disabled,  earnings 
in  latter  case  to  be  considered  as  not  less  than  500  lire  ($96.50). 

(c)  A  daily  allowance  in  case  of  temporary  disability  of  one-half  the  wages 

of  injured  workman,  payable  for  not  more  than  three  months,  if  totally 
disabled,  and  equal  to  one-half  the  reduction  in  wages  occasioned  by  the 
injury,  if  partially  disabled. 

Revision  of  compensation.  Both  workman  and  insurer  may  ask  for  a  revision 
of  compensation  within  two  }Tears  after  accident. 

Insurance.  Employers  must  insure  their  employees  in  (a)  The  National  Acci- 
dent Insurance  Fund,  (b)  an  authorized  insurance  company,  (c)  an  association 
of  employers  for  mutual  insurance  against  accidents,  or  (d)  a  private  employers' 
insurance  fund. 

Guarantee  of  payment.     Payments  are  guaranteed  by  the  State. 

Settlement  of  disputes.  In  cases  of  dispute  concerning  temporary  disability 
payments,  the  council  of  prudhommes  or  the  pretor  of  the  locality  in  which  the 
accident  occurred  has  authority  to  sit  in  final  judgment  if  amount  involved  does 
not  exceed  200  lire  ($38.60).  Disputes  involving  larger  amounts  are  referred  for 
settlement  to  the  local  magistrates. 

Luxemburg. 

Date  of  enactment.  April  5,  1902,  in  effect  April  15,  1903.  Sick  insurance 
law  enacted  July  31,  1901. 

Injuries  compensated.  All  injuries  by  accident  during  or  because  of  the  em- 
ployment, resulting  in  death  or  disability  for  more  than  three  days,  unless  caused 
intentionally  by  the  victim  or  during  the  commission  of  an  illegal  act. 

Industries  covered.  Mines,  quarries,  manufactories,  metallurgical  establish- 
ments; gas  and  electric  works;  transportation  and  handling;  building  and  engi- 
neering construction;  and  certain  artisans'  simps  having  at  least  five  employees 
regularly  and  using  mechanical  motive  power.  By  administrative  order  other 
establishments  may  become  subject  to  the  law  if  regarded  dangerous. 

"Persons  compensated.  Workmen  and  those  supervising  and  technical  officials 
whoso  annual  earnings  are  Less  than  3,000  francs  ($579).  Certain  other  classes  of 
person-  may  be  voluntarily  insured. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  29 


Government  employees.  Act  applies  to  government  telegraph  and  telephone 
services,  public  works  conducted  by  public  agencies,  and  other  governmental  indus- 
trial establishments,  unless  other  provisions  are  made  for  pensioning  employees. 
Penal  institutions  are  not  included. 

Burden  of  payment  Benefits  and  cost  of  treatment  first  thirteen  weeks  pro- 
vided by  sick  benefit  funds,  to  which  employers  contribute  one-third  and  employees 
two-thirds,  if  injured  person  is  insured  against  sickness;  if  not,  because  employed 
less  than  one  week,  by  an  accident  insurance  association,  supported  by  contributions 
of  employers;  if  not  insured  for  other  reasons,  by  the  employer  direct;  all  benefits 
and  treatment  after  thirteen  weeks  paid  by  accident  insurance  association. 

Compensation  for  death: 

(a)  Funeral  expenses,  one-fifteenth  of  the  annual  earnings,  but  not  less  than 

40  francs   ($7.72),  nor  more  than  80  francs   ($15.44). 

(b)  Pensions,  not  to  exceed  60  per  cent,  of  earnings  of  deceased,  to — 

Widow,  20  per  cent,  until  death  or  remarriage;  in  the  latter  case  a 

lump  sum  equal  to  60  per  cent.;  same  payment  to  a  dependent 

widower. 
Each  child,  20  per  cent,  until  15  years  of  age,  even  if  father  survives, 

provided  he  abandons  them,  or  the  mother  who  was    killed    was 

their  main  support. 
Dependent  heirs  in  an  ascending  line,  20  per  cent. 
Dependent  orphan  grandchildren,  20  per  cent  until  15  years  of  age. 
Widow  and  children  have  the  preference  over  other  heirs. 

(c)  In  computing  pensions  only  one-third  of  excess  of  annual  earnings  over 

1,500  francs  ($289.50).  is  considered. 

Compensation  for  disability: 

(a)  Entire  cost  of  medical  and  surgical  treatment. 

(b)  For  temporary  or  permanent  total  disability,  from  third  day  to  end  of 

fourth  week,  50  per  cent.,  and  from  fifth  to  end  of  thirteenth  week,  60 
per  cent,  of  wages  of  persons  similarly  employed;  after  thirteen  weeks, 
66  2-3  per  cent,  of  annual  earnings  of  injured  person. 

(c)  For  partial  disability  a  portion  of  above  (depending  upon  degree  of  dis- 

ability), which  may  be  increased  to  full  amount,  as  long  as  injured 
employee  is  without  employment. 

(d)  Lump  sum  payments  may  be  substituted  for  pensions  when  degree  of  dis- 

ability is  not  greater  than  20  per  cent. 

(e)  In  computing  pensions  only  one-third  of  excess  of  annual  earnings  over 

1,500  francs  ($289.50)  is  considered. 

Revision  of  compensation.  Demands  for  change  of  amount  of  compensation 
may  be  made  within  three  years. 

Insurance.  Payments  are  met  by  mutual  accident  insurance  association  of 
employers,  in  which  all  employees  must  be  insured  at  expense  of  employers. 

Guarantee  of  payment.  Insurance  association  conducted  under  State  super- 
vision. 

Settlement  of  disputes.  Appeals  from  the  decisions  of  the  association  may  be 
carried  within  forty  days  to  a  justice  of  the  peace,  who  is  required  to  invite  two 
delegates,  representing  employer  and  employee,  to  assist  in  an  advisory  capacity. 
Further  appeals  may  be  taken  to  the  higher  courts. 


30  EUKOPEAN  AND  CANADIAN  LAWS :  No.  65 


Manitoba. 

Date  of  enactment.     March  16,  1910,  in  effect  January  1,  1911. 

Injuries  compensated.  Injuries  by  accident  arising  out  of  and  in  the  course 
of  the  employment  which  caused  death,  or  disabled  workman  for  at  least  two  weeks 
from  earning  full  wages  at  the  work  at  which  he  was  employed.  Compensation  is 
not  paid  when  the  injury  is  attributable  to  the  workman's  drunkenness,  nor  if 
attributable  to  his  serious  or  wilful  misconduct  and  only  partial  incapacity  results. 
Compensation  is  paid  in  every  case  where  injuries  result  in  permanent  disability  or 
death. 

Industries  covered.  Any  employment  in  which  five  or  more  workmen  are  em- 
ployed. 

Persons  compensated.  Workmen  and  apprentices,  and  government  or  other 
clerks  whose  remuneration  is  less"  than  $1,200  a  year. 

Compensation  to  dependants  is  limited  to  those  residing  within  the  province 
at  the  time  of  the  accident  and  during  the  period  of  payment. 

Burden  of  payment.     Is  upon  the  employer. 

Compensation  for  death: 

(a)  To  those  wholly  dependent  on  earnings  of  deceased  for  the  necessaries  of 

life,  a  sum  not  exceeding  $1,500. 
(&)   To  those  in  part  dependent  a  sum  not  exceeding  $1,500,  to  be  agreed  upon 

or  fixed  by  arbitration, 
(c)   If  no   dependants,  the   reasonable   expenses  of  medical   attendance  and 

burial,  not  to  exceed  $100. 

Compensation  for  incapacity.  A  weekly  payment  not  exceeding  50  per  cent, 
of  adult  workman's  average  weekly  earnings  with  the  same  employer  and  not  more 
than  $10  per  week;  to  apprentices  up  to  $6  per  week,  payable  after  the  first  two 
weeks  following  the  injury.  There  are  two  provisoes:  (1)  That  if  the  injured 
workman  is  not  a  journeyman  working  at  his  own  trade,  he  shall  be  entitled  only 
to  25  per  cent,  diminution  which  the  accident  caused  to  his  wage-earning  capacity 
for  the  first  month,  40  per  cent,  for  the  second  month,  and  thereafter  50  per  cent.; 
and  (2)  that  the  total  amount  payable  shall  not  exceed  $1,500. 

Revision  of  compensation.  An  order  of  the  court  or  an  award  as  to  the  sums 
payable  to  dependants  may  be  varied,  and  weekly  payments  may  be  revised  at  the 
request  of  either  the  employer  or  of  the  workman. 

Insurance.  Employers  may  make  contracts  with  workmen  for  substitution 
of  a  scheme  of  compensation,  benefit  or  insurance  in  place  of  the  provisions  of  the 
act,  if  the  Attorney-General  certifies  that  the  scheme  is  not  less  favourable  to  the 
workmen  and  their  dependants  than  the  provisions  of  the  act,  and  a  majority  of 
the  workmen  to  whom  the  scheme  is  applicable  are  in  favour  of  the  scheme.  A  cer- 
tificate is  given  for  a  period  of  not  less  than  five  years,  and  under  it  employers  are 
liable  only  in  accordance  with  the  scheme. 

Guarantee  of  payment.  If  the  employer  has  entered  into  a  contract  with  in- 
surers in  respect  of  liability  under  the  act  to  any  workman,  the  rights  of  the  em- 
ployer, in  case  he  becomes  bankrupt,  are  transferred  to  and  vested  in  the  workman. 
In  case  of  the  employer's  assignment,  or  of  the  winding  up  of  a  company,  the  com- 
pensation due  before  the  date  of  the  assignment  or  of  the  commencement  of  the 
winding-up,  is,  up  to  $500  in   any  individual  case,  classed   as  a  preferred  claim. 

Settlement  of  disputes.  Disputes  are  settled  by  arbitration;  either  by  an  arbi- 
tration committee  representing  employer  and  workman,  or  by  a  single  arbitrator, 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  31 

or,  in  the  absence  of  agreement,  by  the  court.  The  Attorney-General  may  confer 
upon  an  arbitration  committee  any  or  all  of  the  powers  conferred  by  the  act  ex- 
clusively on  courts. 

New  Brunswick. 

Is  more  a  liability  than  a  compensation  act. 
"  Workman  "  is  narrowly  defined. 

Dependants  unless  residents  in  Canada  at  the  time  of  the  death  of  the  work- 
man have  no  claim. 

The  act  is  of  limited  application. 

Newfoundland. 

Date  of  enactment.     February  18,  1908,  in  effect  July  1,  1908. 

Injuries  compensated.  Injuries  by  accident  arising  out  of  and  in  the  course 
of  the  employment  which  disable  a  workman  for  at  least  one  week  from  earning 
full  wages  at  the  work  at  which  he  was  employed,  unless  the  injury  is  attributable 
to  the  serious  or  wilful  misconduct  of  the  injured  workman. 

Industries  covered.  Railways,  factories,  mines,  quarries,  engineering  work, 
employment  in  or  about  any  building  which  exceeds  twenty  feet  in  height  and  is 
being  constructed  or  repaired  by  means  of  a  scaffolding,  or  being  demolished,  or 
on  which  machinery  driven  by  steam,  water,  or  other  mechanical  power  is  being 
used  for  the  purpose  of  its  construction,  repair  or  demolition. 

Persons  compensated.  Every  person  who  is  engaged  in  manual  labor  or  other- 
wise. 

Government  ivorhmen.  The .  act  applies  to  workmen  employed  under  the 
Crown,  to  whom  the  act  would  apply  if  the  employer  were  a  private  person. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  the  employer. 

Compensation  for  death : 

(a)  To  those  dependants  wholly  dependent  upon  the  workman's  earnings  a 

sum  equal  to  the  workman's  earnings  in  the  employment,  of  the  same 
employer  during  the  three  years  next  preceding  the  injury,  or  the  sum 
of  $750,  whichever  of  those  sums  is  the  larger,  but  not  exceeding 
$1,500,  or  one  hundred  and  fifty-six  times  the  average  weekly  earnings 
of  the  workman  during  the  period  of  his  actual  employment. 

(b)  To  dependants  partially  dependent  upon  the  workman's  earnings,  a  sum 

equal  to  or  less  than  the  above  sum,  as  may  be  agreed  upon  or  as  may 
be  determined  to  be  reasonable  and  proportionate  to  the  injury  to  the 
said  dependants. 

(c)  If  no  dependants,  the  reasonable  expenses  of  his  medical  attendance  and 

burial,  not  exceeding  $50. 

Compensation  for  disability.  Where  total  or  partial  incapacity  for  work  re- 
sults from  the  injury,  a  weekly  payment  during  the  incapacity  not  exceeding  50 
per  cent,  of  Jhe  workman's  average  weekly  earnings  during  the  previous  twelve 
months,  if  he  has  been  so  'long  employed,  but  if  not  then  for  any  less  period  during 
which  he  has  been  in  the  employment  of  the  same  employer,  such  weekly  payments 
not  to  exceed  $5. 

If  the  incapacity  lasts  less  than  two  weeks  no  compensation  is  payable  in  re- 
spect of  the  first  week. 


32  EUBOPEAN  AND  CANADIAN  LAWS:         No.  65 

A  lump  sum  may  be  substituted  for  the  weekly  payments,  after  six  months,  on 
the  application  of  the  employer,  the  amount  to  be  settled,  in  default  of  agreement, 
by  the  court  or  a  judge. 

Revision  of  compensation.  Weekly  payments  may  be  reviewed  at  the  request 
of  either  the  employer  or  the  workman,  and  the  amount  of  payment  shall,  in  de- 
fault of  agreement,  be  settled  by  the  court  or  a  judge. 

Insurance.  Insurance  is  not  obligatory.  Employers  may  contract  with  their 
workmen  for  the  substitution  of  a  scheme  of  compensation,  benefit,  or  insurance 
in  place  of  the  provisions  of  the  act,  if  the  government  engineer  certifies  that  the 
scheme .  provides  scales  of  compensation  not  less  favourable  to  the  workman  and 
their  dependants  than  the  corresponding  scales  in  the  act,  and  if  the  scheme  pro- 
vides for  contributions  by  the  workmen,  that  the  scheme  confers  benefits  at  least 
equivalent  to  those  contributions  in  addition  to  the  benefits  to  which  workmen 
would  have  been  entitled  under  the  act,  and  that  a  majority  of  the  workmen  are 
in  favour  of  the  scheme. 

Guarantee  of  payment.  There  is  no  guarantee  of  payment.  When  an  em- 
ployer becomes  liable  under  the  act  to  pay  compensation,  and  is  entitled  to  any 
sum  from  insurers  on  account  of  the  amount  due  to  a  workman  under  such  liabil- 
ity, then  in  the  event  of  the  employer  becoming  insolvent,  or  making  an  arrange- 
ment or  composition  with  his  creditors,  the  workman  shall  be  subrogated  to  the 
rights  of  the  employer  against  the  ■  insurers. 

The  workman  has  also  in  respect  of  any  compensation  due  a  preferential  claim 
against  an  insolvent  employer. 

Settlement  of  disputes.  All  proceedings  for  the  recovery  of  compensation  lor 
an  injury  are  taken  by  action  in  the  Supreme  Court. 


New  South  Wales. 

Date  of  enactment.  November  5,  1900,  in  effect  January  1,  1901.  Amended 
on  December  28,  1901.  Scale  of  compensation  increased  by  governor  on  July  28, 
1905,  in  accordance  with  power  given  by  the  act. 

Injuries  compensated.  Injuries  caused  primarily  by  accident  while  at  work 
and  resulting  in  death  or  incapacity  to  attend  to  ordinary  occupation. 

Industries  covered.  Any  mine/  or  works  adjoining  such  mine,  in  or  about  which 
(including  the  works)  15  or  more  persons  are  employed. 

Persons  compensated.  Persons  employed  in  or  about  a  mine,  or  works  adjoin- 
ing. 

law. 


Government  employees.     No  mention  of  government  employees  is  made  in  the 


Burden  of  payments.  Distributed  equally  between  employees  on  one  hand  and 
employers  and  State  on  the  other.  Workmen  pay  4l/£  pence  (9  cents)  per  week, 
employers  pay  50  per  cent  of  workmen's  contributions,  and  State  grants  subsidy 
of  an  amount  equal  to  employer's  contribution. 

Compensation  for  death: 

(a)   Funeral  benefit  of  £12  ($58.40). 

(6)  Weekly  pensions:  To  widow,  10  shillings  ($2.43),  until  death  or  re- 
marriage, and  for  each  child  under  14  years,  additional  3  shillings  (73 
cents)  :  to  motherless  children,  10  shillings  ($2.43)  until  no  child  is 
below  14  years. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  33 


(c)  If  deceased  was  unmarried,  weekly  pensions  of  LO  shillings  ($2.43)  to 
dependent  father  and  mother,  each,  and  additional  3  shillings  (73 
cents)   for  each  child   under   1  I   years  of  dependent   mother. 

((/)  In  absence  of  dependent  parents,  10  shillings  per  week  ($2.43)  to  depen- 
dent sister  or  sisters  (sharing  equally)  and  additional  3  shillings  (73 
cents)   for  each  child  under    1  I   years. 

Compensation  for  disability: 

(a)   Weekly  allowance  of  13  shillings  ($3.65)   until  able  to  resume  work. 

(6)  In  case  of  permanent  total  disability,  additional  3  shillings  (73  cents) 
weekly  for  each  child  under  14. 

Revision  of  Compensation.  Made  under  rules  promulgated  bv  a  board  con- 
sisting of  members  representing  workmen,  employers,  and  State: 

Insurance.  Payments  are  met  by  miners'  accident  relief  fund  administered 
by  the  board  above  mentioned. 

Guarantee  of  payment.  Governor  must  revise  scale  of  benefits  to  correspond 
with  financial  condition  of  fund. 

Settlement  of  disputes.  Controversies  are  settled  by  the  board  which  admin- 
isters the  fund,  except  that  fines  and  arrears  of  contributions  may  be  collected 
through  regular  courts. 

New  Zealand. 

Date  of  enactment.  October  18,  1900,  to  take  effect  at  a  date  fixed  by  the 
governor  by  order  in  council.  Amended  October  3,  1902;  November  23,  1903; 
November  8,  1904;  October  31,  1905,  October  29,  1906;  Act  1908;  No.  34,  Oct. 
28,  1911. 

Injuries  compensated.  All  injuries  to  workmen  arising  out  of  and  in  the 
course  of  the  employment  causing  death  or  disability  for  at  least  one  week,  except 
when  due  to  serious  and  wilful  misconduct  of  the  workman  injured. 

Industries  covered.  Industrial,  commercial,  manufacturing,  building,  agri- 
cultural, pastoral,  mining,  quarrying,  engineering,  and  hazardous  work  carried  on 
by  or  on  behalf  of  the  employer  as  a  part  of  his  trade  or  business. 

Persons  compensated.     All  persons  under  contract  with  an  employer. 

Government  employees.  Act  applies  to  work  carried  on  by  or  on  behalf  of  the 
government  or  any  local  authority  if  it  would,  in  case  of  a  private  employer,  be  an 
employment  to  which  the  act  applies. 

Burden  of  payment.  Entire  cost  of  compensation 'rests  upon  employer;  but 
if  there  are  contractors,  then  on  such  contractors  and  the  principal,  jointly  and 
severally. 

Compensation  for  death: 

(a)  A  sum  equal  to  three  years'  earnings,  but  not  less  than  €200   ($973.30) 

nor  more  than  £400  ($1,946.60),  to  those  wholly  dependent  upon  earn- 
ings of  deceased. 

(b)  A  sum  less  than  above  amount  if  dependants  were  partly  dependent  upon 

deceased,  to  be  agreed  upon  by  the  parties  or  fixed  by  a  magistrate  or  by 
the  arbitration  court. 

(c)  Eeasonable  expenses  of  medical  attendance  and  burial,  not  exceeding  £30 

($146.00),  in  case  deceased  leaves  no  dependants. 
3  l. 


34  EUKOPEAN  AND  CANADIAN  LAWS:         No.  65 

Compensation  for  disability: 

(a)   A    weekly    payment    during    disability    not    exceeding    50    per    cent    of 
employee's  average  weekly  earnings  during  the  previous  twelve  months, 
but  not  to  exceed  £2    ($9.73)    nor  to  fall  below  £1    ($4.87)    where 
employee's  ordinary  rate  of  pay  at  the  time  of  the  accident  was  not  less 
than  30  shillings  ($7.30)   per  week.     Total  liability    of    employer    is 
limited  to  £300   ($1,459.95).     No  payment  is  made  for  first  week  if 
disability  does  not  continue  for  a  longer  period  than  two  weeks. 
(&)   A  lump  sum  may  be  substituted  for  weekly  payments  for  permanent  total 
or  partial  disability,  to  be  agreed  on  by  the  parties  or,  in  default  of 
agreement,  determined  by  the  court  of  arbitration. 
Revision  of  compensation-     Weekly  payments  may  be  revised  at  request  of 
either  party. 

Insurance.  Employers  may  contract  with  their  employees  for  substitution  of 
a  scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions  of  the  Act 
if  the  scheme  is  shown  to  be  not  less  favourable  to  the  general  body  of  employees  and 
their  dependants  than  the  provisions  of  the  act.  In  such  case  the  employer  is 
liable  only  in  accordance  with  the  scheme. 

Guarantee  of  payment.  When  an  employer  becomes  liable  under  this  act  to 
pay  compensation,  and  is  entitled  to  any  sum  from  insurers  on  account  of  the 
amount  due  to  a  workman  under  such  liability,  then  in  the  event  of  his  becoming 
insolvent  such  workman  has  a  first  claim  upon  this  sum.  Compensation  for  injuries 
sustained  in  the  course  of  employment  in  or  about  a  mine,  factory,  building,  or 
vessel  is  deemed  a  charge  upon  the  employer's  interest  in  such  property  and  has 
priority  over  all  charges  other  than  those  lawfully  existing  at  the  time  of  the  com- 
mencement of  the  act. 

Settlement  of  disputes.  Disputes  arising  under  the  act  are  settled  by  the 
Court  of  Arbitration  under  the  Industrial  Arbitration  Act.  Where  claim  for  com- 
pensation does  not  exceed  £200  ($973.30)  proceedings  may  be  instituted  before 
a  magistrate  whose  decision  is  final,  except  that  in  cases  where  amount  involved 
does  not  exceed  £50  ($243.33)  either  party  may,  with  the  consent  of  the  magistrate, 
and  in  cases  where  the  claim  exceeds  £50  ($243.33),  without  such  consent,  appeal 
from  his  decision  on  any  point  of  law. 

Norway. 

Date  of  enactment.    July  23,  1894,  in  effect  July  1,  1895. 

Injuries  compensated.  All  injuries  by  industrial  accidents,  causing  death,  or 
disability  for  more  than  four  weeks,  or  requiring  treatment  after  that  period,  unless 
intentionally  brought  about  by  the  injured  person. 

Industries  covered.  Practically  all  factories  and  workshops  using  other  than 
hand  power;  mines  and  quarries;  the  handling  of  ice,  explosives  or  inflammable 
wares;  building  and  engineering  construction,  electric  work,  transportation,  sal- 
vage and  diving,  chimney  sweeping,  and  fire  extinguishing.  Employees  in  other 
industries  may  avail  themselves  of  this  insurance  system. 

Persons  compensated.     All  workmen  and  overseers. 

Government  employees.  Act  covers  employees  in  government  or  communal  ser- 
vice, wben  engaged  in  any  of  the  industries  enumerated  above,  unless  at  least  equal 
compensation  is  provided  by  special  regulation. 

Burden  of  payment.     Cost  of  compensation  rests  upon  employer. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  35 

Compensation  in  case  of  death: 

(a)  Funeral  benefit  of  50  crowns  ($13.40). 

(b)  Pensions  to  heirs  not  exceeding  50  per  cent,  of  earnings  to  be  distributed 

tor- 
Widow,  20  per  cent,  of  earnings  until  death  or  remarriage;  in  the  latter 
case  a  lump    sum    equal    to    three    annual    payments;    or    dependent 
widower,  if  incapable  of  work,  20    per    cent,    of    annual    earnings    of 
deceased  while  his  disability  lasts. 
Each  child,  15  per  cent,  of  animal  earnings  till  age  of  15  years,  if  one  parent 
survives,  or  20  per  cent,  if  neither  survives;  15  per  cent,  for  each  parent 
to  each  child,  when  both  parents  have  died  as  result  of  injuries. 
Dependent  relatives  in  ascending  line,  if  there  is  a  residue  after  providing 
for  above-mentioned  heirs,  a  pension  of  20  per  cent,  of  earnings  until 
death  or  cessation  of  need,  to  be  divided  equally;   but    living   parents 
exclude  grandparents  from  participation. 

(c)  In  computing  pensions,  the  excess  of  annual  earnings  over  1,200  crowns 

($321.60)  is  not  considered. 

(d)  Pension  payments  are  in  addition  to  prior  allowances  granted  for  dis- 

ability. 

Compensation  for  disability: 

(a)  Free  medical  and  surgical  treatment,  or  cost  of  same,  after  four  weeks. 

(b)  If  employee  is  totally  disabled  for  more  than  four  weeks  an  allowance  of 

60  per  cent,  of  the  earnings,  but  not  less  than  0.50  crown  (13  cents  per 
diem  or  150  crowns  ($40.20)  per  annum;  and  a  proportionate  allow- 
ance in  case  of  partial  disability. 

(c)  If  injured  employee  is  forced  to  stay  in  a  hospital,  dependants  receive 

allowances  during  that  time  equal  to  the  pensions  granted  in  cases  of 
death. 

(d)  If  injured  employee  is  not  a  member  of  a  sick    insurance    fund    he    is 

entitled  to  receive  from  employer  directly  sick  benefits  and  free  medical 
treatment  from  first  day  of  injury. 

(e)  In  computing  allowances  the  excess  of  annual  earnings  over  1,200  crowns 

($321.60)  is  not  considered. 

Revision  of  compensation.  Compensation  is  subject  to  revision  upon  demand 
of  either  the  beneficiary  or  the  insurance  office. 

Insurance.  A  state  central  insurance  office  is  established  for  the  entire  King- 
dom, in  which  all  employees  subject  to  the  law  must  be  insured  by  employer,  unless 
he  is,  for  special  reasons,  relieved  by  royal  order  from  the  obligation  of  insurance. 

Guarantee  of  payment.     Insurance  office  is  guaranteed  by  the  State. 

Settlement  of  disputes.  Appeals  from  decisions  of  insurance  office  may  be 
entered  within  six  weeks  with  the  special  insurance  commission. 

Nova  Scotia. 

Date  of  enactment.    April  22,  1910,  in  effect  February  1,  1911. 

Injuries  compensated.  All  injuries  by  accident  to  workmen  arising  out  of  and 
in  the  course  of  employment  causing  disability  for  over  two  weeks,  unless  attribu- 
table to  the  serious  and  wilful  misconduct  of  drunkenness  of  the  workman. 


36  EUROPEAN  AND  CANADIAN  LAWS:         No.  65 

Industries  covered.  Railways,  factories,  mines,  quarries,  engineering  work, 
loading  and  unloading  vessels,  building  using  scaffolding  or  mechanical  motive 
power,  employing  not  less  than  ten  workmen. 

Persons  compensated.  Workmen  and  clerks  regularly  employed  whose  remun- 
eration does  not  exceed  $1,000  a  year.  Named  companies  which  have  relief  socie- 
ties are  exempted  from  the  operation  of  the  act.  Employees  in  agriculture,  the 
fisheries,  shipbuilding,  lumbering  and  sawmills  are  excluded. 

Government  employees.  Are  within  the  act,  if  the  employment  itself  is  cov- 
ered by  the  Act. 

Burden  of  payment.     Is  upon  emplo}rer. 

Compenastion  for  death: 

(a)  To  dependants   residing   in    Canada   wholly  dependent   upon   workman's 

earnings  at  the  time  of  his  death,  a  sum  equal  to  three  years'  earnings, 
not  less  than  $1,000,  nor  more  than  $1,500. 

(b)  To  partial  dependants,  not  more  than  above  amount  to  be  agreed  upon  or 

fixed  by  arbitration. 

(c)  If  no  dependants  reasonable  expenses  of  medical  attendance  and  burial 

not  exceeding  $200. 

Compensation  for  disability: 

A  weekly  payment  after  second  week  not  exceeding  50  per  cent,  of  average 
weekly  earnings ;  not  more  than  $7  a  week,  nor  in  all  than  $1,500. 

A  lump  sum  to  be  settled  by  arbitration  may,  on  application  of  employer, 
be  substituted  for  weekly  payments. 

Revision  of  compensation.  May  be  had  at  request  of  either  employer  or  work- 
man. 

Insurance.  Employers  may  make  contracts  with  workmen  for  substitution  of 
a  scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions  of  the 
act,  if  the  Lieutenant-Governor-in-Council  certifies  that  the  scheme  is  not  less 
favourable  to  the  general  body  of  workmen  and  dependants  than  the  provisions 
of  the  act.     The  employers  are  then  liable  only  in  accordance  with  the  scheme. 

Guarantee  of  payment.  If  employer  is  entitled  to  any  sum  from  insurers  in 
respect  of  any  liability  under  the  act  to  any  workman,  in  case  employer  becomes 
bankrupt,  or  makes  a  compromise  or  arrangement  with  creditors,  the  workman 
shall  be  subrogated  to  the  rights  of  the  employer  against  the  insurers.     (S.  10.) 

Settlement  of  disputes.  Disputes  are  settled,  (a)  by  an  arbitration  committee 
representatives  of  employer  and  workman;  or,  (b)  by  a  single  arbitrator  agreed 
upon;  or   (c)   by  an  arbitrator  appointed   by  the  'County  Court  judge. 

Quebec. 

Dale  of  enactment.    May  29th,  1909,  in  effect  January  1,  1910. 

Injuries  compensated.  All  injuries  happening  to  workmen  by  reason  of  or  in 
the  course  of  their  work  causing  death  or  disability  lasting  over  seven  days. 
Injuries  intentionally  caused  by  the  person  injured  are  not  compensated. 

Industries  covered.  Building,  manufacturing,  transportation,  engineering 
mill  construction  work,  mining,  quarrying  stone;  wood  and  coal  yards;  any  indus- 
trial enterprise  using  machinery  operated  by  power.  Agriculture  and  sailing  ves- 
!     are  excluded. 


1912  WOKK.MK.VS  COMPENSATION    COMMISSION.  ;)7 

Persons  compensated.  Workmen,  apprentices,  and  employees  earning  not 
more  than  $1,000  per  annum.  Foreign  workmen  or  their  representatives  are  com- 
pensated only  if  and  so  long  as  they  reside  in  Canada. 

Government  employees.    Governmenl  employees  are  not  mentioned  in  the  act. 

Burden  of  payment.     The  entire  expense  rests  upon  the  employer. 

Compensation  for  death: 

(a)  Medical  and  funeral  expenses  not  in  excess  of  $25,  unless  same  are  pro 

vided  by  an  association  of  which  the  deceased  was  a  member. 

(b)  Four  times  average  yearly  wages,  but  not  less  than  $1,000  nor  more  than 

$2,000,  payable  to  surviving  consort,  to  children  under  1(5  years  of  age, 
and  dependent  ascendants;  shares  to  be  agreed  upon  or  determined  by 
court. 

All  amounts  may  be  decreased  or  increased  by  court  on  account  of  inexcus- 
able fault  of  employee  or  employer. 

Payments  made  for  disability  before  death  are  deducted. 

Compensation  for  disability : 

(a)  For  permanent  total  disability,  a  pension  equal  to  50  per    cent,    of    the 

yearly  wages    (including  the  maximum  and  minimum   amounts). 

(b)  For  permanent  partial  incapacity,  a  pension  equal  to  50  per  cent,  of  the 

amount  by  which  the  wages  have  been  reduced  because  of  the  injury. 

(c)  For  temporary  incapacity  lasting  over  seven  days,  compensation  equal  to 

one-half  the  daily  earnings  received  at  the  time  of  the  accident, 
beginning  with  the  eighth  day. 

(d)  In  computing  pensions  only  one-fourth  the  excess  of  the  annual  earnings 

between  $600  and  $1,000  is  considered.     The  capital    of    any    pension 
shall  not  exceed  $2,000,  unless  higher,  because  of  accidents  due  to  inex- 
cusable fault  of  the  employer. 
Revision  of  compensation.     Demands  for  change  of  amount  of  compensation 
may  be  made  within  four  years. 

Insurance.  No  reference  concerning  the  insurance  of  risks  under  the  law  is 
contained  in  the  act,  except  as  to  the  payment  of  pensions  due,  which  may  be 
transferred  to  insurance  companies.  No  release  from  liability  is  obtained  by  the 
employer  by  such  transfer. 

Guarantee  of  payment.  Claims  for  compensation  or  pensions  form  a  lien  on 
the  real  and  personal  property  of  the  employer  so  long  as  they  remain  unpaid. 

Settlement  of  disputes.  Superior  and  Circuit  Courts  have  jurisdiction  over  all 
disputes  arising  under  this  act.  All  proceedings  are  summary,  no  trial  by  jury 
being  allowed. 

Queensland. 

Date  of  enactment.     December  20,  1905,  in  effect  March  31,  1906. 

Injuries  compensated.  All  injuries  by  accident,  arising  out  of  and  in  the 
course  of  the  employment,  which  cause  death  or  disable  a  workman  for  at  least 
two  weeks  from  earning  full  wages  at  the  work  at  which  he  was  employed,  except 
when  the  injury  is  directly  attributable  to  his  serious  and  wilful  misconduct  or 
when  it  occurs  while  proceeding  to  or  from  his  place  of  work. 

Industries  covered.  Industrial,  commercial,  manufacturing,  building,  agri- 
cultural, pastoral,  mining,  quarrying,  engineering,  or  hazardous  work  carried  on 
by  or  on  behalf  of  the  employer  as  a  part  of  his  trade  or  business. 

Persons  compensated.     All  persons  under  contract  with  an  employer. 


38  EUBOPEAN  AND  CANADIAN  LAWS:         No.  65 

Government  employees.  Act  applies  to  any  work  carried  on  by  or  on  behalf 
of  the  government  or  any  local  authority  if  it  would,  in  case  of  a  private  employer, 
be  an  employment  to  which  the  act  applies. 

Burden  of  payment.    Entire  cost  of  compensation  rests  upon  employer. 
Condensation  for  death: 

(a)  A  sum  equal  to  three  years'  earnings,  but  not  less  than  £200  ($973.30) 
nor  more  than  £400  ($1,946.60),  to  those  wholly  dependent  upon 
earnings  of  deceased;  but  aged  and  infirm  employees  may  agree  in 
advance  to  accept  a  reduced  amount. 
(6)  A  sum  less  than  above  if  heirs  are  only  partly  dependent. 
(c)  Reasonable  expenses  of  medical  attendance  and  burial,  not  exceeding  £30 
($146),  if  deceased  leaves  no  dependants. 

Compensation  for  disability: 

(a)  A  weekly  payment  during  disability  after  second  week,  not  exceeding  50 

per  cent,  of  employee's  average  weekly  earnings  during  the  previous 
twelve  months,  such  weekly  payments  not  to  exceed  £1  ($4.87),  and 
total  liability  not  to  exceed  £400  ($1,946.60)  ;  except  that  aged  and 
infirm  employees  may  agree  in  advance  to  accept  a  reduced  amount. 

(b)  A  weekly  payment  during  partial  disability  after  second  week,  not  exceed- 

ing one-half  of  difference  between  the  employee's  average  weekly  earn- 
ings before  the  accident  and  the  average  weekly  amount  which  he  is 
earning  or  able  to  earn  after  injury. 

(c)  Minors  may  be  allowed  full  earnings  during  incapacity,  not  exceeding 

10  shillings  ($2.43)  weekly. 

(d)  A  lump  sum  may  be  substituted  for  weekly  payments  after  three  months, 

on  application  of  employer,  the  amount  to  be  agreed  upon  or,  in  default 
of  agreement,  to  be  determined  by  a  police  magistrate. 

Revision  of  compensation.  Weekly  payments  may  be  revised  by  a  police  magis- 
trate at  request  of  either  party. 

Insurance.  Employers  may  contract  with  their  employees  for  substitution  of 
a  scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions  of  the 
act  if  the  scheme  is  officially  certified  to  be  not  less  favourable  to  the  employees 
and  their  dependants  than  the  provisions  of  the  act.  In  such  case  the  employer 
is  liable  only  in  accordance  with  the  scheme, 

Guarantee  of  payment.  AVhen  an  employer  becomes  liable  under  the  act  to 
pay  compensation,  and  is  entitled  to  any  sum  from  insurers  on  account  of  the 
amount  due  to  a  worker  under  such  liability,  then  in  the  event  of  his  becoming 
insolvent,  such  workman  has  a  first  claim  upon  this  sum  for  the  amount  so  due. 

Settlement  of  disputes.  Disputes  arising  under  the  act  are  heard  and  deter- 
mined by  a  police  magistrate,  whose  decision  is  final,  except  that  either  party  may 
appeal  from  this  decision  on  any  point  of  law  with  the  latter's  leave  if  the  claim 
does  not  exceed  £50  ($243.33),  or  without  his  leave  if  it  exceeds  that  amount. 


Eussia. 

Date  of  enactment.     June  2,  (15),  1903,  in  effect  January  1   (14),  1904. 

Injuries  compensated.  All  injuries  by  accidents  occasioned  by  or  on  account 
of  the  work  and  causing  death  or  disability  for  more  than  three  days,  unless  brought 
on  intentionally  by  the  victim  or  due  to  gross  imprudence. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  39 

Industries  covered.  Metallurgical  and  mining  establishments  and  factories 
and  workshops  using  other  than  hand  power,  but  exclusive  of  shops  of  private  rail- 
roads and  steamship  companies  and  certain  rural  industrial  establishments. 

Persons  compensated.  Workmen  and  those  technical  officials  whose  annual 
earnings  do  not  exceed  1,500  rubles  ($772.50). 

Government  employees.  Act  applies  to  mining,  metallurgical  and  manufac- 
turing establishments  of  municipal  and  Zemstvo  governments,  but  not  to  national 
government  employees,  for  whom  special  regulations  exist. 

Burden  of  payment.    Entire  burden  of  payment  rests  upon  employer. 

Compensation  for  death: 

(a)  Funeral  expenses  not  exceeding  30  rubles  ($15.45)  for  an  adult  and  15 

rubles  ($7.73)  for  a  child  under  15  years  of  age. 

(b)  Pensions  to  dependent  heirs  not  exceeding  66  2-3  per  cent,  of  annual 

earnings  of  victim,  distributed  to : 
Widow,  33  1-3  per  cent-  until  death  or  remarriage;  in  the  latter  case  a  lump 

sum  equal  to  three  annual  payments. 
Each  child  until  age  of  15  years  16  2-3  per  cent,  if  one  parent  survives  and 

25  per  cent,  if  neither  parent  survives. 
Dependent  heirs  in  ascending  line,  16  2-3  per  cent.      Each  dependent  orphan 

brother  and  sister  until  15  years  of  age,  16  2-3  per  cent. 
Widow  and  children  take  precedence  over  other  dependent  heirs,  who  share 

the  remainder  in  equal  parts. 

(c)  Pension  may,  by  mutual  consent  of  employer  and  beneficiary,  be  replaced 

by  single  payment  of  ten  times  amount  of  annual  pension  and,  in  case 
of  children,  pension  multiplied  by  the  number  of  years  remaining  for 
pension  payments,  but  not  exceeding  ten. 

Compensation  for  disability: 

(a)  Free  medical  and  surgical  treatment  or  reimbursement  of  expense  of 
same. 

(&)  If  permanently  disabled,  a  pension  of  66  2-3  per  cent,  of  annual  earnings 
of  victim  in  case  of  total  disability,  and  a  pension  proportionate  to 
degree  of  incapacity  in  case  of  partial  disability,  to  be  paid  from  time 
when  degree  of  permanent  disability  was  determined;  if  amount  of 
pension  exceeds  that  of  previous  allowance  for  temporary  disability, 
difference  between  the  two  during  the  period  of  disability  is  paid  to 
permanently  injured  employee. 

(c)  Pension  may,  by  mutual  consent  of  employer  and  beneficiary,  be  replaced 

by  a  single  payment  of  ten  times  amount  of  annual  pension. 

(d)  If  temporarily  disabled,  an.  allowance  of  50  per  cent,  of  actual  wages  of 

victim  from  day  of  accident  until  complete  recovery  from  disability  or 
the  determining  of  degree  of  permanent  disability. 

Revision  of  compensation.  Demands  for  revision  of  payments  or  to  secure  a 
pension  previously  refused  may  be  made  by  either  party  within  three  years. 

Insurance.  Employers  may  transfer  burden  of  payment  of  compensation  by 
insuring  their  employees  in  authorized  insurance  companies,  or  societies. 

Guarantee  of  payment.  On  retiring  from  business  employer  must  guarantee 
payments  by  insurance  or  by  deposit  with  a  State  bank.  In  case  of  insolvency,  pay- 
ments constitute  a  preferred  claim. 


40  EUROPEAN  AND  CANADIAN  LAWS:  No.  65 

Settlement  of  disputes.  Disputes  may  be  carried  into  courts  as  other  civil  cases. 
Such  cases  are  exempt  from  court  fees,  the  documents  are  free  from  stamp  tax, 
and  attorney's  fees  are  fixed  by  law. 

Saskatchewan. 

Date  of  enactment.     March  23,  1911;  in  effect  November  1,  1911. 

Injuries  compensated.  Personal  injuries  by  accident  arising  out  of  and  in  the 
course  of  the  employment 'Unless  the  injury  does  not  disable  the  workman  for  at 
least  one  week  from  earning  wages  at  the  work  at  which  he  was  employed. 

Industries  covered.  Railways,  factories,  mines,  quarries,  engineering  work 
and  building  work,  with  a  special  exception  excluding  emjdoyments  in  agriculture. 

Persons  compensated.    Persons  emplo-yed  in  the  industry. 

Government  employees.     Are  not  mentioned  in  the  act. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  the  employer. 

Compensation.  Not  to  exceed  estimated  earnings  during  preceding  three 
years  of  person  in  same  grade  as  the  injured  emplo}^ee  or  $1,800,  whichever  is 
the  larger,  but  not  to  exceed  in  any  case  $2,000. 

Insurance:    There  is  no  provision  as  to  insurance. 

G  no  ran  tee  of  payment.  No  security  except  that  in  case  of  insolvency  the  em- 
ployee is  subrogated  to  the  right  of  the  employer  against  the  insurer  and  the 
compensation  in  the  case  of  an  assignment  or  winding  up  is  to  the  extent  of  $500 
given  priority  over  other  debts. 

Settlement  of  disputes.  Compensation  is  recoverable  by  action  in  district 
court. 

South  Austealia 

Date  of  enactment.     December  5,  1900,  in  effect  not  earlier  than  June  1,  1901. 

Injuries  compensated.  All  injuries  to  workmen  arising  out  of  and  in  the 
course  of  the  employment  causing  death  or  disability  for  at  least  one  week,  except 
when  due  to  the  serious  and  wilful  misconduct  of  the  workman  injured. 

Industries  covered.  Eailways,  waterworks,  tramways,  electric  lighting  works, 
factories,  mines,  quarries,  engineering  and  building  work,  employments  declared  by 
a  proclamation  of  the  governor  upon  addresses  from  both  houses  of  parliament 
to  be  dangerous  or  injurious  to  health  or  dangerous  to  life  or  limb,  and  agricul- 
tural pursuits  where  mechanical  motive  power  is  used. 

Persons  compensated.    All  persons  engaged  in  manual  labour  or  otherwise. 

Government  employees.  Act  applies  to  civilian  persons  employed  under  the 
Crown  to  whom  it  would  apply  if  the  employer  were  a  private  person. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death: 

(a)  A  sum  equal  to  three  years'  earnings,  but  not  less  than  £150  ($729.98) 
nor  more  than  £300  ($1,459.95),  to  those  wholly  dependent  upon  earn- 
ings of  deceased. 

(I>)  A  sum  less  than  above  amount  if  dependants  were  partly  dependent  upon 
deceased,  to  be  agreed  upon  by  the  parlies  or  fixed  by  arbitration. 

(c)  Reasonable  expenses  of  medical  attendance  and  burial  not  exceeding  £50 
($243-33),   if  deceased   leaves   no   dependants. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  41 

Compensation  for  disability: 

(a)  A  weekly  payment   during  disability  after   first   week,  not  exceeding  50 

per  cent,  of  employee's  average  weekly  earnings  during  the  previous 
twelve  months,  such  weekly  payments  Dot  to  exceed  CI  ($1.87)  nor,  in 
case  of  total  incapacity,  to  he  less  than  7s.  6d.  ($1.83)  per  week,  ami 
total  liability  m>t  to  exceed  6300  ($1,459.95). 

(b)  A  weekly  payment  during  partial  disability  after   first   week  to  he  fixed 

with  regard  to  difference  between  employee's  average  weekly  earnings 
before  the  accident  and  average  weekly  amount  which  he  is  earning  or 
able  to  earn  after  injury. 

(c)  A  lump  sum  not  exceeding  £300    ($1,459.95)    may    be    substituted    for 

weekly  payments,  after  six  months,  on  application  of  either  part}r,  the 
amount  to  be  settled  by  arbitration  under  the  act  in  default  of  aarree- 
ment. 

Revision  of  compensation.  Weekly  payments  may  he  revised  at  request  of 
either  party.- 

Insurance.  Employers  may  contract  with  their  employees  for  substitution  of  a 
scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions  of  the  act, 
if  the  public  actuary  certifies  that  the  scheme  is  on  the  whole  not  less  favourable  to 
general  body  of  employees  and  their  dependants  than  the  provisions  of  the  act.  In 
such  case  employer  is  liable  only  in  accordance  with  the  scheme. 

Guarantee  of  payment.  When  an  employer  become  liable  under  the  act  to 
pay  compensation,  and  is  entitled  to  any  sum  from  insurers  on  account  of  the  amount 
due  to  a  workman  under  such  liability,  that  in  the  event  of  his  becoming  insolvent 
such  workman  has  a  first  claim  upon  this  sum,  and  any  special  magistrate  may 
direct  its  payment  into  the  savings  bank  to  be  applied  to  payment  of  compensations 
due. 

Settlement  of  disputes.  Disputes  arising  under  the  act  are  settled  by  the 
arbitration  of  existing  committees  representative  of  employers  and  employees,  or, 
if  either  party  objects,  by  a  single  arbitrator  agreed  on  by  the  parties,  or,  in 
absence  of  agreement,  by  special  magistrate.  An  arbitrator  appointed  by  the  magis- 
trate has  all  the  powers  of  a  local  court. 


Spain. 

Date  of  enactment.    January  30,  1900,  in  effect  July  28,  1900. 

Injuries  compensated.  All  injuries  by  accidents  to  employees  in  the  course  of 
and  by  reason  of  the  employment  causing  death  or  disability.  Compensation  may 
be  reduced  if  injured  person  was  engaged  in  an  illegal  act. 

Industries  covered.  Manufacturing,  mines,  quarries,  metallurgical  establish- 
ments, construction  work,  industries  injurious  to  health,  transportation,  gas  and 
electric  works,  street  cleaning,  theatres,  and  agricultural  and  forestry  establish- 
ments using  power  machinery. 

Persons  compensated.  Workmen  performing  manual  labour,  including  helpers 
and  apprentices. 

Government  employees.  Act  applies  to  employees  of  state  factories  and  other 
government  establishments,  to  labor  accidents  in  war  and  naval  departments,  and 
to  establishments  of  provincial  and  communal  governments. 


42  EUROPEAN  AND  CANADIAN  LAWS:         No.  65 


Burden  of  payment.    Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death: 

In  addition  to  any  prior  benefits  paid  for  disability : — 

(a)  Funeral  expenses  not 'exceeding  100  pesetas  ($19.30). 

(b)  A  lump  sum  equal  to  two  years'  earnings,  if  widow  and    children    or 

dependent  orphan  grandchildren  under  16  years  survive;  eighteen 
months'  earnings  if  only  children  or  orphan  grandchildren  survive; 
one  year's  earnings  if  only  widow  survives;  ten  months'  earnings  to 
dependent  parents  or  grandparents  over  60  years  of  age,  in  absence  of 
widow  or  children;  if  two  or  more  survive;  seven  months'  earnings  if 
only  one  parent  or  grandparent  survives. 

(c)  For  these  lump  sum  payments,  by  mutual  consent,    the    following    pen- 

sions may  be  substituted:  40  per  cent,  of  annual  earnings  when  widow 
and  children  or  grandchildren  survive;  20  per  cent,  of  annual  earnings 
when  only  widow  survives;  10  per  cent,  to  each  dependent  parent  or 
grandparent  over  60  years  of  age,  when  no  widow  or  children  survive, 
but  not  over  30  per  cent,  in  the  aggregate;  compensation  to  widow 
ceases  on  her  remarriage,  and  to  children  on  the  attaining  the  age  of 
16  years. 

(d)  In  these  cases,  the  daily  earnings  to  be  considered  as  not  less  than  150 

pesetas  (29  cents). 

(e)  All  of  these  compensations  are  increased  by  50  per  cent,  if  the  establish- 

ment is  lacking  in  the  required  safety  provisions. 

Compensation  for  disability: 

(a)   Free  medical  and  surgical  treatment  during  disability. 

(&)  Fifty  per  cent,  of  daily  earnings,  including  Sundays  and  holidays,  from 
day  of  injury  to  day  of  recovery  from  disability,  but  not  over  one 
year,  after  which  case  is  treated  as  one  of  permanent  disability. 

(c)  In  case  of  permanent  disability,  in  addition  to  the  foregoing,  a  sum  equal 

to  two  years'  earnings  for  total  disability. 

Eighteen  months'  earnings,  if  total  disability  extends  only  to  former  trade. 

One  year's  earnings  in  cases  of  partial  permanent  disability  for  usual  employ- 
ment, unless  the  employer  agrees  to  employ  injured  workman  at  some 
other  work  at  old  rate  of  wages. 

(d)  In  these  cases,  the  daily  earnings  to  be  considered  as  not  less  than  150 

pesetas  (29  cents). 

(e)  Compensations  are  increased  by  50  per  cent,  if  the  establishment  is  lack- 

ing in  the  required  safety  provisions. 

Revision  of  compensation.     No  special  provision  is  made  in  the  law- 

Insurance.  Employers  may  contract  with  authorized  insurance  companies  to 
assume  obligations  imposed  by  law. 

Guarantee  of  payment.    No  special  provision  is  made  in  the  law. 

Settlement  of  disputes.  Disputes  concerning  compensation  under  the  law  may 
be  carried  to  special  permanent  labour  tribunals  consisting  of  representatives  of 
the  State,  employers,  and  employees. 


1912  WOR KM  FA'S  COMPENSATION  COMMISSION.  43 

Sweden. 

Date  of  enactment.  Approved  July  5,  1901,  in  effect  January  1,  1903 ;  amended 
June  3,  1904. 

Injuries  compensated.  Injuries  by  accidents  to  workmen  resulting  from  the 
employment,  and  causing  death  or  disability  for  more  than  sixty  days,  unless  due 
to  the  wilful  act  or  gross  negligence  of  the  victim  or  to  the  wilful  act  of  a  third 
person  who  has  neither  the  supervision  nor  the  direction  of  the  work. 

Industries  covered.  Practically  all  establishments  engaged  in  forestry  work, 
mining,  quarrying,  turf  and  ice  cutting  and  handling,  manufacturing,  chimney 
sweeping,  rafting,  railway  and  tramway  service,  handling  goods,  building  trades, 
conduit,  road  and  other  construction  work,  and  electricity,  and  gas,  and  water  dis- 
tribution. Employers  in  other  industries  may  insure  their  employees  in  the  State 
Insurance  Institute  and  thereby  be  placed  under  provisions  of  the  act.  Employees 
in  other  industries  may  secure  the  protection  of  the  act  by  insuring  themselves  in 
the  State  Insurance  Institute. 

Persons  compensated.     Workmen  and  foremen. 

Government  employees.  Act  applies  to  employees  in  the  state  and  communal 
services  when  engaged  in  any  of  the  industries  enumerated  above. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death: 

When  death  results  from  the  injury  within  two  years. 

(a)  Funeral  benefit  of  GO  crowns  ($16.08). 

(b)  Annual  pensions  not  exceeding  in  the  aggregate  300  crowns  ($80.40),  to 

be  distributed  to  widow,  until  remarriage  120  crowns   ($32.16)  ;  each 
child  under  15  years  of  age  60  crowns  ($16.08). 
Compensation  for  disability: 

(a)  If  permanently  disabled,  annual  pension  of  300  crowns  ($80.40)  ;  in  case 

of  total  disability,  and  a  smaller  sum  corresponding  to  loss  of  earning 
power  in  case  of  partial  disability,  pension  to  begin  with  sixty-first 
day  of  disability,  or  later  if  permanent  character  of  the  disability  was 
not  then  established. 

(b)  If  temporarily  disabled  for  more  than  sixty  days,  1  crown  (27  cents)  per 

day  beginning  with  sixty-first  day. 

Revision  of  compensation.  Suit  may  be  brought  in  a  court  of  first  instance 
by  injured  employee  for  a  revision  of  compensation  wTithin  two  years  from  the 
date  of  the  fixing  of  the  same. 

Insurance.  If  an  injured  person  receives  an  allowance  or  pension  from  an 
organization  which  is  supported  entirely  or  in  greater  part  by  the  employer,  or  if 
the  victim  is  insured  in  a  private  organization  by  his  employer,  the  amounts  received 
from  such  a  source  may  be  deducted  from  payments  required  of  employer  under 
the  act.  Employers  may  transfer  burden  of  payment  of  compensation  by  insuring 
in  the  State  Insurance  Institute,  created  for  this  purpose  by  the  act,  or  in 
individual  cases  purchase  annuities  for  pensioners  from  this  institution.  Other 
arrangements  may  be  made  between  employers  and  employees  if  the  State  Insur- 
ance Institute  finds  upon  examination  that  they  are  not  unfavourable  to  the 
employees. 

Guarantee  of  payment.  An  employer  may  be  required  to  furnish  adequate 
security  for  the  payment  of  the  pension  to  cover  the  contingency  of  his  neglecting 


11  EUKOPEAN.AND  CANADIAN  LAWS:  No.  65 

to  pay  the  same,  of  his  retiring  from  business  or  leaving  the  country,  or  of  his 
becoming  insolvent.  If  he  fails  to  furnish  security  he  may  be  required  to  pay  a 
lump  sum  equal  to  the  capital  value  of  the  pension  plus  the  payments  and  interest 
due,  which  amount,  in  the  case  of  an  injured  employee,  must  be  invested  in  the 
purchase  of  an  annuity  from  the  State  Insurance  Institute. 

Settlement  of  disputes.  Disputes  may  be  settled  either  by  arbitration  or  by 
bringing  suit  in  a  court  of  first  instance.  The  demand  for  arbitration  must  be 
made  or  the  suit  brought  within  two  years  after  the  accident  or  in  case  of  fatal 
accidents  within  two  years  after  the  death  of  the  victim.  If  the  action  is  against 
the  State  Insurance  Institute,  one  year  more  is  allowed. 

Transvaal. 

Date  of  enactment.     August  20,  1907,  in  effect  April  1,  1908. 

Injuries  compensated.  Injuries  by  accident  arising  out  of  and  in  the  course 
of  the  employment  which  cause  the  workman's  death  or  necessitate  his  absence 
from  work  for  over  one  week.  Compensation  is  not  paid  when  injury  is  due  to 
serious  and  wilful  misconduct. 

Industries  covered.  Employment  at  or  about  any  trade,  industry,  business,  or 
public  undertaking,  including  agriculture,  but  excluding  domestic  service. 

Persons  compensated.  Any  white  person  regularly  employed  for  the  purposes 
of  the  employer's  trade  or  business  whose  annual  earnings  do  not  exceed  £500 
($2,433.25),  but  exclusive  of  home  workers  and  subcontractors. 

Government  employees.  All  civil  government  employees  are  covered  by  this 
act  if  employed  in  establishments  or  undertakings  to  which  the  law  applies,  pro- 
vided that  when  other  pension  provisions  have  been  made  the  injured  employee  or 
his  surviving  dependants  have  the  right  to  choose  between  the  two  methods  of 
compensation. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death : 

(a)  A  sum  equal  to  two  years'  wages,  but  not  more  than  £500   ($2,133.25), 

to  those  dependent  upon  earnings  of  the  deceased,  to  be  distributed 
among  the  dependants,  either  by  agreement  or  by  order  of  the  local 
courts. 

(b)  Temporary   payments   previously   made   for   over   three   months   shall   be 

deducted  from  the  above  amounts. 

(c)  If  deceased  left  no  dependants,  reasonable  expenses  of  medical  attendance 

and  burial,  not  exceeding  £60   ($291.99). 
Compensation  for  disability: 

(a)  A  weekly  payment  during  disability  of  50  per  cent,  of  the  wages  at  the 

time  of  the  injury. 

(b)  In   case  of  total  permanent  disability,  an  amount  equal  to  three  years' 

wages,  minus  the  amount  paid  in  weekly  compensation,  but  not  over 
£750  ($3,619.88). 

(c)  In  case  of  partial  disability,  an  amount  equal  to  probable  loss  of  earning 

power  for  three  years,  minus  the  amount  paid  out  in  weekly  compensa- 
tion, but  not  over  £375  ($1,824.94). 

(d)  In  case  of  minors  suffering  total  permanent  disability  the  court  may  in- 

crease the  compensation  to  £300  ($1,459.95)  if  three  years'  wages 
are  less  than  this  amount,  and  if  suffering  from  partial  permanent 
disability  the  court   may  increase  the  compensation  to  £150   ($729.98). 


1912  WOEKMEN'S  COMPENSATION   COMMISSION.  i;, 

Revision  of  compensation.  Employer  may  apply  for  revision  or  -citing  aside  of 
order  to  pay  weekly  compensation  on  the  ground  of  recovery  of  the  employee  or  his 
wilful  retardation  of  recovery,  or  refusal  to  undergo  medical  examinations,  or  of 
lack  of  notice  of  accident,  or  subsequent  proof  of  serious  and  wilful  misconduct. 
Injured  employee  has  a  right  to  make  a  new  application  if  compensation  is  denied 
and  injury  subsequently  proves  more  serious  than  expected. 

Insurance.  Eight  of  insurance  against  the  obligations  of  this  act  is  not 
regulated.     No  release  from  liability  is  effected   by  such   insurance. 

Settlement  of  disputes.  Orders  for  granting  benefits  are  given  by  local  magis- 
trates, after  holding  an  inquiry.  Appeals  may  be  had  to  the  magistrate  himself 
and  from  him  to  the  supreme  court. 

Western  Australia. 

Date  of  enactment.  February  19,  1902,  in  effect  on  a  date  fixed  by  the  governor 
by  order  in  council. 

Injuries  compensated.  All  injuries  caused  to  a  workman  arising  out  of  and  in 
the  course  of  the  employment  causing  death  or  disability  for  at  least  two  weeks, 
except  when  due  to  serious  and  wilful  misconduct  of  the  workman  injured. 

Industries  covered.  Railways,  waterworks,  tramways,  electric  light  plants,  fac- 
tories, mines,  quarries,  engineering  and  building  work,  and  employments  declared 
by  a  proclamation  of  the  governor,  issued  pursuant  to  addresses  from  both  houses 
of  parliament,  to  be  dangerous  or  injurious  to  health  or  dangerous  to  life  or  limb. 

Persons  compensated.  All  persons  engaged  under  contract  in  any  employ- 
ment. 

Government  employees.  Act  applies  to  all  persons  employed  under  the  Crown 
to  whom  it  would  apply  if  employer  were  a  private  person. 

Burden  of  payment.     Entire  cost  of  compensation  rests  upon  employer. 

Compensation  for  death: 

(a)  A  sum  equal  to  three  years'  earnings,  but  not  less  than  £200   ($973.30) 

nor  more  than  £400  ($1,946.60),  to  those  wholly  dependent  upon  earn- 
ings of  deceased. 

(b)  A  sum  less  than  above  amount  if  dependants  were  partly  dependent  upon 

deceased,  to  be  agreed  upon  by  the  parties  or  fixed  by  local  court. 

(c)  Eeasonable  expenses  of  medical  attendance  and  burial  not  to  exceed  £100 

($486.65),  if  deceased   leaves   no   dependants. 

Compensation  for  disability: 

(a)  A  weekly  payment  during  disability  after  second  week,  not  exceeding  50 

per  cent,  of  injured  person's  average  Aveekly  earnings  during  the  previ- 
ous twelve  months,  such  weekly  payment  not  to  exceed  £2  ($9.73)  and 
total  liability  not  to  exceed  £300  ($1,459.95). 

(b)  In  case  of  partial  disability,  regard  is  to  be  had  to  the  difference  between 

average  weekly  earnings  before  and  after  the  accident,  and  to  any  pay- 
ment other  than  wages  made  by  employer  on  account  of  the  injury. 

(c)  A  lump  sum  may  be  substituted  for  weekly  payments,  after  six  months, 

on  the  application  of  the  employer,  the  amount  to  be  determined  by 
the  court  in  default  of  agreement. 


46  ACTS  BY  STATE  LEGISLATURES:         No.  65 


Revision  of  compensation.  Weekly  payments  may  be  revised  by  the  court  at 
request  of  either  party. 

Insurance.  Employers  may  contract  with  their  employees  for  substitution  of 
a  scheme  of  compensation,  benefit,  or  insurance  in  place  of  the  provisions  of  the 
act,  if  the  registrar  of  friendly  societies  certifies  that  the  scheme  is  on  the  whole 
not  less  favourable  to  the  general  body  of  employees  and  their  dependants  than  the 
provisions  of  the  act.  In  such  case  employer  is  liable  only  in  accordance  with  this 
scheme. 

Guarantee  of  payment.  When  an  employer  becomes  "liable  under  the  act  to 
pay  compensation,  and  is  entitled  to  any  sum  from  insurers  on  account  of  the 
amount  due  to  a  workman  under  such  liability,  then  in  the  event  of  his  becoming 
insolvent,  such  workman  has  a  first  charge  upon  this  sum  for  the  amount  so  due. 
Compensation  for  injuries  sustained  in  the  course  of  employment  in  or  about 
a  mine,  factory,  building,  or  vessel  is  deemed  a  charge  on  the  employer's  interest 
in  such  property. 

Settlement  of  disputes.  Disputes  arising  under  the  act  are  settled  by  the 
local  court  of  the  district  in  which  the  injury  is  received. 


SCHEDULE  III 


ACTS   PASSED  BY  STATE  LEGISLATURES  IN  THE  UNITED  STATES  OF 

AMERICA.* 

In  CALIFOKNTA  the  common  law  defences  of  assumption  of  risk  and  feillow- 
servant  rule  are  abolished  in  all  actions  to  recover  damages  for  personal  injury 
where  recovery  is  sought  on  the  ground  of  want  of  ordinary  or  reasonable  care 
on  the  part  of  the  employer.  Neither  is  contributory  negligence  of  the  employee  a 
bar  to  recovery  when  it  was  slight  compared  to  the  negligence  of  the  employer, 
but  damages  may  be  diminished  in  proportion  to  the  amount  of  negligence  attri- 
butable to  the  employee.  In  place  of  recovery  through  the  courts,  the  act  pro- 
vides a  schedule  of  compensation  payable  to  injured  employees  regardless  of  the 
question  of  negligence.  The  law  applies  to  all  employers,  including  the  state  itself 
and  each  county,  city,  town,  village  and  school  district.  Employees  of  the  state 
and  its  political  divisions  are  subject  to  the  compensation  plan  without  choice. 
All  other  employers  and  employees  have  the  right  to  elect  to  become  subject  or 
not  subject.  Such  election  is  made  by  employers  by  filing  a  statement  with  the 
industrial  accident  board,  which  binds  him  to  the  compensation  plan  for  one  year, 
and  thereafter  renews  automatically  unless  the  employer  files  a  notice  at  least 
sixty  days  before  the  expiration  of  any  year  to  the  effect  that  he  withdraws  his 
election  to  be  subject  to  the  act.  Employees  are  deemed  to  be  bound  by  the  act 
unless  they  give  notice  to  the  contrary  in  writing. 

The  compensation  paid  to  injured  employees  includes  necessary  medical  ex- 
penses for  ninety  days  after  the  injury,  but  not  to  exceed  $100,  and  in  addition  an 
indemnity  based  upon  the  earning  power  of  the  employee.  In  case  the  injury 
results  in  death,  if  the  deceased  leaves  persons  wholly  dependent  upon  him.  the 
maximum  amount  of  indemnity  to  be  paid  to  such  dependants  shall  equal  three 


♦This  table  is  taken   from  the  Corporation  Trust  Company  Journal,   No.  27,  1911, 
and  is  substantially  acccurate. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  47 

times  the  average  annual  earnings  of  the  employee,  but  not  less  than  $1,000  nor 
more  than  $5,000.  In  case  the  deceased  employee  leaves  only  partly  dependent 
persons  or  no  dependants,  the  indemnity  is  reduced  accordingly.  In  case  of  total 
disability,  65  per.  cent,  of  the  average  weekly  earnings  of  the  employee  are  paid 
during  t  he  period  of  such  disability,  which  amount  is  increased  to  100  per  cent, 
of  his  earnings  during  such  period,  if  any,  in  which  his  injury  renders  him  so 
helpless  as  to  require  the  assistance  of  a  nurse.  The  total  sum  of  payments,  how- 
ever, is  not  to  exceed  three  times  the  average  annual  earnings  of  the  employee. 
Other  rates  of  compensation  or  indemnity  are  prescribed  for  partial  disability.  No 
indemnity  is  paid  for  disability  not  lasting  more  than  one  week. 

Any  dispute  or  controversy  concerning  compensation  is  referred  to  the  indus- 
trial accident  board,  consisting  of  three  members  appointed  by  the  governor  and 
confirmed  by  the  senate.  Either  party  may  present  a  certified  copy  of  any  award 
of  the  board  to  the  superior  court,  which  shall  thereupon  without  notice  render 
judgment  accordingly.  Awards  may  be  reviewed  by  the  superior  court  and  appeals 
taken  from  the  superior  court  to  the  supreme  court. 

In  effect   September   1,   1911. 

In  ILLINOIS  the  law  applies  to  especially  dangerous  employments,  which  are 
described  in  the  act,  and  include  construction  or  electrical  work,  transportation 
by  land  or  water  and  allied  employments,  mining  and  employments  in  which  ex- 
plosive materials,  molten  metal  or  inflammable  fluids  are  handled  in  dangerous 
quantities  or  regarding  which  statutory  regulations  are  imposed  for  the  placing 
and  using  of  machinery.  Any  employer  covered  by  the  act  may  elect  to  be  bound 
by  the  compensation  plan.  If  he  does  not  so  elect,  the  defence  of  assumed  risk  and 
the  fellow-servant  rule  are  denied  him,  and  contributory  negligence  shall  be 
considered  by  the  jury  only  to  the  extent  of  reducing  damages.  Every 
employer  is  presumed  to  have  accepted  the  compensation  plan  unless  notice 
to  the  contrary  is  filed  with  the  State  Bureau  of  Labour  Statistics,  but  he 
may  renounce  the  act  at  the  expiration  of  any  year  by  filing  proper  notice.  Every 
employee  or  employers  accepting  the  act  is  deemed  to  be  bound  by  it  unless 
notice  to  the  contrary  is  filed.  An  employee  bound  by  the  act  has  no  common 
law  or  statutory  right  to  recover  damages  other  than  the  compensation  provided  in 
the  law,  except  in  certain  cases. 

The  amount  of  compensation  to  be  paid  under  the  act  is  based  on  the  earning 
power  of  the  employee.  In  case  of  death,  if  the  deceased  leaves  lineal  heirs  to  whose 
support  he  had  contributed  within  five  years  previous  to  the  time  of  his  death, 
the  compensation  shall  equal  four  times  the  average  annual  earnings  of  the 
employee,  but  not  less  than  $1,500  nor  more  than  $3,500.  Other  amounts  are 
prescribed  if  the  deceased  leaves  collateral  heirs  or  no  heirs.  In  case  of  complete 
disability,  the  compensation  shall  equal  one-half  of  the  earnings,  but  not  less  than 
$5  nor  more  than  $12  per  week,  for  a  maximum  period  of  eight  years  or  until  the 
compensation  so  paid  equals  the  amount  payable  as  a  death  benefit.  Thereafter 
the  compensation  shall  be  for  life  at  a  rate  equal  to  8  per  cent,  of  the  amount  which 
would  have  been  payable  if  the  accident  had  resulted  in  death,  but  not  less  than  $10 
per  month.  No  compensation  is  to  be  paid  for  the  first  week  of  disability  except 
for  necessary  first  aid,  medical  and  hospital  services,  not  to  exceed  $200.  Neces- 
sary services  of  a  physician  or  surgeon  shall  be  paid  for  during  the  entire  period  of 
disability.  Compensation  for  partial  disability  or  disfigurement  is  to  be  paid  at 
lesser  specified  rates. 


4S  ACTS  BY  STATE  LEGISLATURES':         No.  65 

Disputes  regarding  compensation  shall  be  determined  either  by  agreement  or 
arbitration.  In  case  of  arbitration  each  party  selects  an  arbitrator  and  the  judge 
of  the  proper  court  selects  the  third.  Appeal  may  be  taken  from  the  decision  of 
the  arbitrators  to  the  circuit  court  of  the  court  that  appointed  the  third  arbitrator. 

In  effect  May  1,  1912. 

In  KANSAS  the  law  applies  only  to  railways,  factories,  mines  and  employments 
in  which  risk  to  life  and  limb  of  the  workman  are  inherent,  necessary  or  sub- 
stantially unavoidable.  In  such  employments,  all  employers  by  whom  fifteen  or 
more  workmen  are  employed  may  elect  to  pay  the  stated  scale  of  compensation 
prescribed  by  the  law  by  filing  a  notice  with  the  Secretary  of  State.  Such  election 
is  presumed  to  renew  automatically  each  year,  unless  terminated  by  sixty  days' 
notice  prior  to  the  expiration  of  any  year.  Every  employee  is  deemed  to  have 
accepted  the  act  unless  he  gives  notice  to  the  contrary.  If  an  employer  elects  not 
to  accept  the  act  he  is  deprived  of  the  common  law  defences  of  assumed  risk, 
fellow-servant  rule,  and  contributory  negligence,  except  that  the  latter  shall  be 
considered  by  the  jury  in  assessing  the  amount  of  recovery.  Any  employer  accept- 
ing the  act  is  not  deprived  of  these  defences  should  he  be  sued  by  an  employee  who 
has  not  accepted  the  act,  unless  the  injury  was  caused  by  the  wilful  or  gross 
negligence  of  the  employer. 

The  rate  of  compensation  is  based  upon  the  employee's  earnings.  In  case  of 
death,  if  the  deceased  leaves  persons  wholly  dependent,  residing  in  the  United  States 
or  Canada,  the  indemnity  is  three  times  his  earnings  for  the  preceding  year,  but 
not  less  than  $1,200  nor  more  than  $3,600.  In  case  of  total  incapacity,  the  com- 
pensation is  50  per  cent,  of  his  earnings  payable  periodically  for  a  maximum  period 
of  ten  years  during  such  incapacity,  but  not  less  than  $6  nor  more  than  $15  per 
week.  Other  rates  of  compensation  are  prescribed  if  there  are  no  dependants  in 
case  of-  death  or  if  the  incapacity  for  work  is  only  partial  in  case  of  injury.  No 
compensation  is  allowed  for  injuries  which  do  not  disable  the  workman  for  more 
than  two  weeks.  An  injured  employee's  right  to  compensation  may  be  terminated 
if  he  removes  beyond  the  boundaries  of  the  United  States  or  Canada. 

Disputes  regarding  compensation  may  be  settled  by  arbitration  if  mutually 
agreeable  to  employer  and  workman,  and  the  arbitrator's  award  with  the  consent  to 
arbitration  attached,  shall  be  filed  in  the  office  of  the  clerk  of  the  proper  district 
court.  In  default  of  agreement  or  arbitration,  a  workman  may  enforce  his  right 
to  compensation  in  any  court  of  competent  jurisdiction. 

In  effect  January  1,  1912. 

In  MASSACHUSETTS  the  law  creates  The  Massachusetts  Employees'  Insur- 
ance Association  governed  by  a  board  of  fifteen  directors  appointed  by  the  governor 
in  the  first  instance,  and  therafter  elected  by  the  subscribers.  Any  employer 
in  the  Commonwealth  may  become  a  subscriber.  Subscribers  shall  be  divided 
into  groups  according  to  the  nature  of  the  business  and  the  degree  of 
risk  of  injury.  Subscribers  in  each  group  will  pay  annually  such  premiums  as 
may  be  required  to  pay  compensation  tor  injuries  which  may  occur  in  that  year. 
The  association  thereupon  pays  all  claims  to  which  any  subscriber  may  become 
liable,  either  under  the  slated  schedule  of  compensation  provided  for  in  the  act 
or  as  a  result  of  any  action  at  law  for  injuries  sustained  by  an  employee.  If  any 
i  mployer  fails  to  become  a  subscriber  to  the  association,  he  is  deprived  of  the 
defence  of  contributory   negligence,   the    fellow-servant    rule  and    the   doctrine   of 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  49 

assumed  risk,  but  these  defences  are  available  to  a  subscriber  if  the  injured  employee 
chooses  to  claim  his  common  law  right  of  ad  ion  rather  than  receive  the  stated 
compensation  of  the  act. 

The  schedule  of  compensation  is  based  on  a  percentage  of  the  average  weekly 
wages  of  the  employee,  being  50  per  cent,  for  a  period  of  three  hundred  weeks,  but 
not  less  than  four  nor  more  than  ten  dollars  a  week,  in  case  of  death,  when  the 
deceased  leaves  persons  wholly  dependent  on  him.  In  case  of  total  incapacity  the 
rate  is  the  same,  the  maximum  period  of  payment  is  five  hundred  weeks,  the 
maximum  total  payment,  three  thousand  dollars.  No  compensation  is  paid  for  an 
injury  which  does  not  incapacitate  the  employee  tor  at  Leasi  two  weeks. 

An  industrial  accident  hoard  is  created  to  administer  the  law.  When  an 
agreement  is  reached  between  the  association  and  an  injured  employee  in  regard 
to  compensation  under  the  act,  a  memorandum  of  the  same  is  filed  with  the  board 
for  approval,  and  if  approved  becomes  enforcihle  as  a  degree  of  the  superior  court. 
In  case  of  disagreement  as  to  compensation,  the  industrial  accident  board  calls  for 
the  formation  of  a  committee  of  arbitration  of  three  members,  one  of  whom  shall 
be  a  member  of  the  board,  the  other  two  named  respectively  by  the  two  parties. 
The  decision  of  the  arbitration  committee  becomes  enforcible  as  a  decree  of  the 
superior  court,  unless  a  claim  for  review  is  filed  by  either  party  within  seven  days. 
In  case  of  review,  the  industrial  board  shall  decide  and  from  its  decision  there 
shall  be  a  right  of  appeal  to  the  supreme  judicial  court. 

That  part  of  the  act  creating  the  Massachusetts  Employees'  Insurance  Asso- 
ciation in  effect  January  1st,  1912 ;  the  remainder  of  the  act  in  effect  July  1st. 
1912. 

In  NEVADA  the  act  applies  to  workmen  engaged  in  manual  or  mechanical 
labour  in  or  on  the  erection  of  buildings  or  bridges  requiring  steel  construction,  tlie 
operation  of  elevators,  construction  and  operation  of  electrical  apparatus,  the  opera- 
tion of  railroad  locomotives,  trains  or  cars,  the  construction  and  repair  of  railroad 
tracks,  the  construction  and  operation  of  mills,  smelters,  mines  or  tunnels  and  all 
work  necessitating  dangerous  proximity  to  explosives.  In  all  employments  enumer- 
ated in  the  law  the  employer  is  bound  to  pay  compensation  for  injuries  or  death 
according  to  the  scale  set  forth  in  the  act,  although  the  workmen  may  pursue 
any  other  remedy  at  law  and  disregard  the  provisions  of  the  act. 

The  common  law  defence  of  assumption  of  risk  and  the  fellow-servant  rule 
are  abolished  and  contributory  negligence  shall  not  bar  recovery  under  the  act 
where  the  employee's  negligence  was  slight  compared  with  that  of  the  employer. 

The  rate  of  compensation  is  based  upon  the  employee's  earnings.  In  case  of 
death,  if  the  deceased  leaves  persons  wholly  dependent,  the  amount  payable  i<  a 
sum  equal  to  three  years'  earnings,  but  not  less  than  $2,000,  nor  more  than 
$3,000.  In  case  of  total  disability,  the  payment  is  60  per  cent,  of  the  average 
weekly  earnings,  each  week  during  the  period  of  disability,  but  not  exceeding  in 
all  $3,000.  Other  compensation  prescribed  by  the  act  varies  according  to  the 
nature  of  the  injury,  and,  in  case  of  death,  if  the  deceased  left  partly-dependent 
persons  or  none.    Xo  compensation  is  paid  for  disability  lasting  less  than  ten  days. 

In  case  of  disputes  over  compensation  the  question  shall  be  submitted  to  a 
board  of  arbitration,  the  employer  and  the  workman  each  choosing  one  arbitrator, 
and  the  two  arbitrators  choosing  a  third.  Their  decision,  if  unanimous,  is  bind- 
ing on  both  parties.  On  failure  of  the  arbitrators  to  agree,  either  party  may  apply 
to  a  court  of  competent  jurisdiction. 

In  effect  July  1,  1911. 
1  L. 


50  ACTS  BY  STATE  LEGISLATIVES:  No.  65 

In  NEW  HAMPSHIEE  the  act  applies  only  to  workmen  engaged  in  manual 
or  mechanical  labour  in  or  on  railroads,  mills,  factories,  and  other  employments 
enumerated  as  dangerous  because  in  them  the  risk  of  employment  and  the  danger 
of  injury  caused  by  fellow-servants  are  great  and  difficult  to  avoid.  Any  employer 
of  workmen  in  the  occupations  enumerated  in  the  act  may  elect  to  be  subject  to 
the  payment  of  compensation  to  injured  employees  according  to  a  stated  scale. 
If  he  does  not  elect  to  accept  the  compensation  feature  of  the  law,  the  fellow- 
servant  rule  and  the  doctrine  of  assumed  risk  are  denied  him  as  defences  and  the 
plea  of  contributory  negligence  shall  avail  only  when  the  fact  of  such  contributory 
negligence  is  made  to  appear  by  a  preponderance  of  evidence. 

An  employer  signifies  his  intention  to  accept  the  compensation  plan  by  filing 
a  declaration  Math  the  Commissioner  of  Labour,  and  must  thereupon  satisfy  the 
Commissioner  of  his  financial  ability  to  comply  with  the  law  or  file  a  bond  con- 
ditioned upon  his  discharge  of  all  liability  incurred  under  the  act.  An  employer 
may  at  any  time  revoke  his  acceptance  of  the  compensation  plan  by  filing  a  declara- 
tion to  that  effect.  Even  though  an  employer  has  accepted  the  compensation  plan, 
his  employees  may  choose  between  accepting  the  stated  compensation  and  com- 
mencing an  action  for  damages.  In  the  latter  event,  the  common  law  defences  are 
not  denied  the  employer. 

The  rate  of  compensation  is  based  upon  the  earnings  of  the  employee,  being,  in 
case  of  death,  when  the  deceased  leaves  relatives  wholly  dependent,  a  sum  equal 
to  one  hundred  and  fifty  times  the  average  weekly  earnings.  In  case  of  total 
incapacity  the  maximum  rate  is  fifty  per  cent,  of  the  average  weekly  earnings,  but 
not  exceeding  $10  a  week,  for  three  hundred  weeks.  No  compensation  shall  be 
received  for  incapacity  lasting  not  more  than  two  weeks. 

Any  question  as  to  compensation  arising  under  the  act  shall  be  determined 
by  agreement  or  in  equity.  The  injured  workman  or  his  representative  may 
recover  compensation  in  any  court  having  jurisdiction,  and  any  employer,  who  has 
declared  his  intention  to  act  under  the  compensation  feature  of  the  law,  may  apply 
to  the  superior  court  for  a  determination  of  the  amount  to  be  paid  an  injured 
workman. 

In  effect  January  1,  1912. 

In  NEW  JERSEY  the  law  applies  to  all  kinds  of  employments  and  to  all  em- 
ployers. The  law  is  divided  into  two  sections.  Section  two  contains  the  stated 
scale  of  compensation  to  be  received  by  employees  for  injuries  sustained  by  them, 
provided  both  the  employer  and  employee  have  elected  to  accept  this  scale  in  lieu 
of  any  other  method,  form  or  amount  of  compensation.  Every  contract  of  hiring 
is  presumed  to  have  been  made  under  section  two,  unless  the  contract  expressly 
provides  that  section  two  shall  not  apply,  or  unless  either  party  gives  written 
notice  to  the  other,  prior  to  any  accident,  that  the  said  section  shall  not  apply. 
Any  contract  for  the  operation  of  section  two  may  be  terminated  on  sixty  days' 
notice  by  either  party.  In  all  cases  where  either  party  renounces  the  stated  scale 
of  compensation  under  section  two,  action  for  damages  may  be  tried  before  a  jury. 
Where  personal  injury  is  caused  by  the  actual  or  lawfully  imputed  negligence  of 
I  lie  employer,  the  doctrine  of  assumed  risk,  and  the  fellow-servani  rule,  may  not 
be  pleaded  as  grounds  of  defence.  Neither  is  contributory  negligence  to  be  a 
defence,  except  wilful  negligence,  which  shall  be  a  question  of  fact  to  be  submitted 
to  the  jury,  and  the  burden  of  proof  to  establish  wilful  negligence  shall  be  upon  the 
employer. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  ol 

The- rate  of  compensation  to  be  paid  under  the  act  is  based  upon  the  wages 
of  the  employee  received  at  the  time  of  the  accident.  In  case  of  death,  if  the 
deceased  leaves  actual  dependants,  the  maximum  rate  is  60  per  cent.,  which  is  paid 
to  a  widow  with  five  or  more  children.  Children  over  sixteen  are  not  considered  as 
dependants,  and  aliens  residing  outside  of  the  United  State-  cannot  receive  compensa- 
tion. For  total  disability  50  per  cent,  of  the  wages  may  be  received  for  a  period 
not  exceeding  400  weeks,  but  in  no  case  shall  the  compensation  be  less  than  $5  nor 
more  than  $10  per  week.  For  partial  disability  or  loss  of  limbs  other  rates  of 
compensation  are  provided. 

In  case  of  disputes  over  compensation,  either  party  may  submit  the  claim 
to  the  judge  of  the  court  of  common  pleas  of  such  county  as  would  have  jurisdic- 
tion in  a  civil  case,  who  hears  and  disposes  of  such  suits  in  a  summary  manner. 

In  effect  July  4,  1911. 

In  OHIO  a  non-partisan  state  liability  board  of  awards  is  created  to  administer 
a  state  insurance  fund  from  premiums  paid  jointly  by  employers  and  employees. 
Any  employer  of  five  or  more  workmen  who  shall  pay  the  premiums  to  such  fund 
is  relieved  from  liability  to  respond  in  damages  at  common  law  or  by  statute  for 
injury  or  death  to  his  employees,  during  the  period  covered  by  such  premiums. 
Any  employee  of  such  employer  who  after  due  notice  continues  in  service  is  deemed 
to  have  accepted  the  act.  The  amount  of  premium  shall  be  determined  by  the 
board  according  to  the  risk  in  the  classes  of  employments.  Ninety  per  cent,  of  the 
premium  shall  be  paid  by  the  employer,  ten  per  cent,  by  his  employees,  the  latter 
amount  to  be  paid  through  the  employer  and  deducted  Toy  him  from  the  pay-roll 
of  his  employees. 

Employers  who  fail  to  pay  the  premiums  are  deprived  of  the  defences  of 
the  fellow-servant  rule,  the  assumption  of  risk  and  contributory  negligence.  Choice 
may  be  made  between  accepting  the  award  of  the  board  and  instituting  action  at 
law  in  case  injury  or  death  is  due  to  wilful  negligence  or  failure  on  the  part  of 
the  employer,  and  in  such  cases  nothing  in  the  act  shall  affect  the  civil  liability 
of  such  employer. 

The  State  Liability  Board  of  Awards  is  required  to  disburse  the  insurance  fund 
to  injured  employees  of  insured  employers,  to  pay  for  medical,  nurse  and  hospital 
services,  and,  in  case  of  death,  reasonable  funeral  expenses,  in  addition  to  the 
awards  provided  for  in  the  act.  These  awards  are  based  on  the  average  weekly 
wage  of  the  employee,  being  66  2-3  per  cent,  in  case  of  permanent  total  disability 
until  death,  but  not  more  than  $12  nor  less  than  $5  a  week.  In  case  of  death, 
when  the  deceased  leaves  dependent  persons,  the  payment  of  66  2-3  per  cent, 
of  the  average  weekly  wage  continues  for  a  period  of  six  years  after  the  date  of 
the  injury,  not  to  exceed  a  maximum  amount  of  $3,400  nor  a  minimum  amount 
of  $1,500.  Other  awards  are  specified  when  the  deceased  leaves  partly  dependent 
persons  or  when  the  injury  results  in  temporary  or  partial  disability.  No  award 
is  made  when  the  disability  does  not  last  more  than  one  week.  The  Board  is 
given  full  power  and  authority  to  hear  and  determine  all  questions  within  its 
jurisdiction,  except  that  the  claimant  for  award  may  appeal  to  the  common  pleas 
court  on  any  ground  going  to  the  basis  of  his  right  to  an  award,  and  neither  party 
shall  have  the  right  to  prosecute  error  as  in  ordinary  civil  cases. 

In  effect  June  15,  1911. 


52  ACTS  BY  STATE  LEGISLATURES:         No.  65 

In  WASHINGTON  the  law  applies  particularly  to  extra  hazardous  works, 
although  employers  and  employees  engaged  in  works  not  extra  hazardous  may  by 
their  joint  election  accept  the  provisions  of  the  act.  This  right  of  voluntary  ac- 
ceptance of  the  act  extends  even  to  employers  and  workmen  engaged  in  interstate 
or  foreign  commerce,  so  far  as  not  forbidden  by  act  of  Congress.  Extra  hazardous 
employments  are  enumerated  in  the  law,  and  include  factories,  mills,  workshops  and 
plants  where  machinery  is  used,  foundries,  mines,  logging,  lumbering  and  ship-build- 
ing operations,  railroading  and  allied  employments-  Other  occupations  not  enumer- 
ated by  the  law  may  be  declared  extra-hazardous  by  the  Industrial  Insurance 
Department  and  brought  under  the  act.  In  all  classes  of  extra-hazardous  employ- 
ments the  remedies  of  workmen  against  employers  for  injuries  received  are  with- 
drawn from  private  controversy  and  a  relief  provided  regardless  of  questions  of 
fault  and  to  the  exclusion  of  every  other  remedy.  This  relief  is  in  the  form  of  an 
"  accident  fund  "  to  which  each  employer  is  required  to  contribute  a  sum  equal 
to  a  percentage  of  his  total  pay-roll  according  to  a  schedule  of  rates  set  forth  in 
the  law  which  varies  according  to  the  relative  hazard  of  each  industry.  If  any 
employer  defaults  in  any  payment  to  the  accident  fund,  the  amount  due  shall  be 
collected  by  action  at  law  in  the  name  of  the  State  as  plaintiff.  In  cases  of  such 
default,  the  injured  employee  may  choose  between  receiving  compensation  under 
the  act  or  proceeding  against  the  employer  by  suit.  If  suit  is  brought,  the  defence 
of  fellow-servant  and  the  assumption  to  risk  shall  be  inadmissable,  and  the  doctrine 
of  comparative  negligence  shall  obtain.  No  contribution  to  the  accident  fund  is 
made  by  the  workmen.  Each  class  of  employment  is  liable  for  the  accidents  occur- 
ring in  such  class,  but  is  not  liable  for  accidents  happening  in  any  other  class.  The 
amounts  contributed  to  the  "  accident  fund  "  are  intended  to  be  no  more  nor  less 
than  enough  to  meet  current  liabilities.  The  custody  of  the  fund  is  placed  in  the 
hands  of  the  State  Treasurer. 

The  scale  of  compensation  is  not  based  on  the  employee's  earning  power.  In 
case  of  death  a  payment  of  $20  a  month  is  made  to  the  widow  (or  widower,  if 
invalid)  during  life  or  until  remarriage,  and  additional  $5  per  month  for  each  child 
under  sixteen,  the  total  payment  not  to  exceed  $35  per  month.  In  case  of  per- 
manent total  disability  resulting  from  injury,  the  employee  receives,  during  the 
period  of  such  disability,  $20  per  month  if  unmarried,  and  if  married  a  maximum 
of  $35  per  month,  depending  upon  the  number  of  children  under  sixteen  years  of 
age.  In  no  case  shall  the  total  sum  paid  for  injury  or  death  exceed  $4,000.  Other 
amounts  are  prescribed  for  temporary  or  partial  disability  or  in  case  of  death,  when 
the  deceased  leaves  orphans  or  partly  dependent  persons  only. 

The  administration  of  the  act  is  imposed  upon  an  Industrial  Insurance  De- 
partment, consisting  of  three  commissioners  appointed  by  the  governor.  It  ascer- 
tains and  establishes  the  amounts  to  be  paid  out  of  the  accident  fund.  Any 
employer,  workman,  beneficiary  or  person  aggrieved  at  any  decision  of  the  depart- 
ment may  appeal  to  the  superior  court  of  the  county  of  his  residence,  in  so  far  as 
such  decision  rests  upon  questions  of  fact,  but  matters  resting  in  the  discretion  of 
the  departmeni  shall  not  be  subject  to  review. 

In  effect  October  1.  1911. 

In  WISCONSIN  the  common  law  defences  of  assumption  of  risk  and  the  fellow- 
servnnt  ride  are  abolished  in  all  actions  againsl  employers  on  account  of  negligence, 
hut  employers  accepting  the  compensation  feature  of  the  law  are  not  deprived  of 
these  defences  if  the  employee  choose-  to  recover  by  action  at  law.  Employers 
having  less  than  four  employees,  however,  do  not  come  within  the  scope  of  the  law. 


1912  WORKMEN'S  COMPENSATION  COMMISSION. 


neither  do  railroad  employees  who  are  included  in  the  Comparative  Negligence  Act 
of  l'JOT.  The  compensation  feature  odE  the  law  is  compulsory  as  to  the  state  and 
its  subdivisions,  and  elective  as  to  all  other  employers.  Such  election  on  the  part 
of  the  employer  is  made  by  filing  a  statement  with  the  Industrial  Accident  Board, 
and  may  be  terminated  by  filing  notice  to  that  effect  at  least  si\t\  days  prior  to  the 
expiration  of  the  first  or  any  succeeding  year.  When  an  employer  has  accepted 
the  compensation  plan  his  employees  are  presumed  to  have  accepted  it  unless  con- 
trary notice  is  given. 

The  compensation  provided  by  the  act  includes  all  medical  expenses  reason- 
ably required  for  ninety  days,  and  in  addition  a  payment  based  upon  the  earnings 
of  the  employee.  In  case  of  death,  when  the  deceased  leaves  one  or  more  persons 
wholly  dependent  on  him  for  support,  the  maximum  is  four  times  the  average 
annual  earnings,  but  not  more  than  $3,000.  In  case  of  total  disability  the  compen- 
sation shall  be  sixty-five  per  cent,  of  the  average  weekly  earnings  during  the  period 
of  such  total  disability.  If  the  injured  employee  becomes  so  helpless  as  to  require 
the  assistance  of  a  nurse,  the  amount  is  increased  to  one  hundred  per  cent,  of  the 
average  weekly  earnings.  No  compensation  is  paid  for  the  first  seven  days  after 
the  injured  employee  leaves  work. 

An  Industrial  Accident  Board  is  created  by  the  law  to  which  disputes  and  con- 
troversies concerning  compensation  shall  be  submitted.  Awards  of  the  Board  may 
be  filed  with  the  Circuit  Court  for  any  county,  whereupon  the  court  shall  render  a 
judgment  in  accordance  therewith.  Parties  aggrieved  by  any  award  may  com- 
mence in  the  Circuit  Court  for  Dane  County  an  action  against  the  board  for  re- 
view of  such  award,  but  the  award  may  be  set  aside  only  on  the  grounds  that  the 
Board  exceeded  its  powers,  or  that  the  award  was  procured  by  fraud  or  that  the 
findings  of  fact  do  not  support  the  award. 

In  effect  September  1,  1911. 


54  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


BRIEF    OF    F.    W.    WEGENAST,    REPRESENTING    THE    CANADIAN 
MANUFACTURERS'    ASSOCIATION. 


Abbreviations  and  References. 

Beven,  Thomas,  on  Workmen's  Compensation,  Fourth  Edition. 

Brandeis,  Louis,  "The  Road  to  Social  Efficiency"  Article  in  aThe  Outlook"  10th 
June,  1911. 

Bulletin  des  Assurance  Sociales,  viii  Congress,  The  Hague,  1910. 

Bulletin  74  U.  S.  Bur.  Lab.— Bulletin  74  United  States  Bureau  of  Labor,  1908. 

Bulletin  78  U.  S.  Bur.  Lab.— Bulletin  78  United  States  Bureau  of  Labor,  1908. 

Cd.  2458,  Memorandum  of  Chairman,  Report  Departmental  Committee,  1904. 

Cd.  2208,  Report  Departmental  Committee,  1904. 

Can.  L.  T. — Canadian  Law  Times. 

Fourth  Special  Report  of  the  U.  S.  Bureau  of  Labor,  Compulsory  Insurance  in 
Germany,  Washington,  1893. 

F.  &  D. — Frankel  &  Dawson,  "  Workingmen's  Insurance  in  Europe,"  New  York, 
1911. 

Friedensburg,  Dr.  Ferd.,  "Die  Praxis  der  deutschen  Arbeiterversicherung,"  1911. 

Gray,  Louis  H.,  "  Practical  Results  of  Workingmen's  Insurance  in  Germany,"  by 
Dr.  Friedensburg.      (Translated.) 

Henderson,  Prof.  Ch.  R.,  "  Industrial  Insurance  in  the  United  States,"  Second 
Edition,  Chicago,  1911. 

Abstract  of  Statements  of  Insurance  Companies  of  Canada,  for  the  year  1911, 

Interim  Rep.  Ont.  Com. — Interim  Report  of  the  Ontario  Commission  on  Work- 
men's Compensation,  1912. 

Journal  of  the  Royal  Society  of  Arts,  Vol.  60. 

Journal  of  Insurance  Institute  of  London,  1909-10. 

Laband,  "  Droit  Public  de  l'Empire  Allemand  IV." 

La  France  Judiciare,  March  12th,  1910,  p.  35. 

Lass,  Ludwig,  Dr.,  "  The  German  Workmen's  Insurance  as  a  Social  Institution," 
St.   Louis,  1904. 

Mayor,  Prof.  James,  "Report  on  Workmen's  Compensation  for  Injuries,"  Toronto, 
'  1900. 

McGilliveray,  "Insurance  Law,"  London,  1912. 

Rep.  Atlantic  City  Conf. — Report  of  the  Atlantic  City  Conference  on  Workmen's 
Compensation  Acts,  July,  1908. 

Rep.  Conf.  Com. — Compensation  for  Industrial  Accidents,  Conference  of 
Commissions,  Chicago,  1910. 

Rep.  Fed.  Com.  U.  S. — Report  of  the  Employers'  Liability  and  Workmen's  Com- 
pensation Commission  United  States  Congress,  1912. 

Rep.  111.  Com. — Report  of  the  Employers'  Liability  Commission,  State  of  Ill- 
inois, 1910. 

Rep.  Mich.  Com. — Report  of  the  Employers'  Liability  and  Workmen's  Com- 
pensation Commission  of  the   State  of  Michigan,  1911. 

Rep.  Minn.  Com. — Report  to  Legislature  of  Minnesota  Employees'  Compensation 
Commission,  1911. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  55 

h— 

Rep.  N.  J.  Com. — Report  of  Commission  on  Employers'  Liability  of  the  State 
of  New  Jersey,  1911. 

24  Rep.  Bur.  of  Statistics,  N.  J.- — Twenty-fourth  Annual  Report  of  The  Bureau 
of  Statistics  of  Labor  and  Industries,  New  Jersey,  1911. 

Rep.  N.  Y.  Com. — Report  to  the  Legislature  of  the  State  of  New  York  of  the 
Employers'   Liability   Commission,    1910. 

Rep.  Ohio  Com. — Report  of  the  Ohio  Commission  on  Employers'  Liability,  Pts. 
I,  II,  and  III,  Columbus,  1911. 

Rep.  Ohio  State  Bar  Ass'n. — Report  of  the  Ohio  State  Bar  Association,  Vol. 
xxxii,  1911. 

Rep.  Queb.  Com. — Report  of  the  Quebec  Commission  on  Labor  Accidents,  Mon- 
treal, 1908. 

Rep.  Wash.  Com. — Report  of  the  Washington  Commission  appointed  to  investi- 
gate the  Problems  of  Industrial  Accidents,  Olympia,  1910. 

Rep.  Wis.  Com. — Workmen's  Compensation  Bill  and  Report,  Wisconsin,  1911. 

Ruegg,  "Employers'  Liability  and  Workmen's  Compensation."  Canadian  Edition, 
1910. 

S.  &  E. — •Schwedtman  and  Emery,  "Accident  Prevention  and  Relief."  An  in- 
vestigation of  the  Subject  in  Europe,  with  Special  Attention  to  England  and 
Germany;  for  the  National  Association  of  Manufacturers,  New  York,  1911. 

Scots,  L.  T.- Scott's  Law  Times. 

24  Rep.  IT.  S.  Bur.  Lab.— Twenty-fourth  Report  of  the  U.  S.  Bureau  of  Labor, 
Workmen's  Insurance  and  Compensation  Systems  in  Europe,  Vols.  I,  and  II, 
1909. 

Walton,  F.  P.,  "  Workmen's,  Compensation  Act  of  1909  of  the  Province  of  Quebec." 

Zacher,   Dr.,  Article   on   "  Accident  Insurance "   in  Handworterbuch   der   Staats- 

wissenschaften,  Vol.  VIII,  Jena,  1911. 


56  CANADIAN  MANUFACTURERS-'  ASSOCIATION:  No.  65 


INTRODUCTORY. 


This  brief  is  submitted  as  representing  the  official  views  of  the  Canadian 
Manufacturers'  Association — a  body  representing  some  twenty-eight  hundred 
manufacturing  concerns  and  embracing  in  its  membership  between  eighty  and 
ninety  per  cent,  of  the  manufacturing  interests  of  the  Dominion  of  Canada.  The 
outlines  of  the  Association's  position  were  laid  down  in  a  report  submitted  by  a 
special  committee  and  unanimously  adopted  by  the  Executive  Council  of  the 
Association  on  the  14th  December,  1911.  This  brief  is  an  amplification  of  the 
report  with  citations   and   quotations   in   support. 

The  literature  upon  the  subject  of  workmen's  compensation  which  has  during 
the  last  few  years  reached  an  immense  bulk,  is  rapidly  increasing,  and  it  is 
characteristic  of  the  subject  that  the  older  literature  rapidly  loses  value  as 
experience  in  the  different  jurisdictions  accumulates.  While  in  this  brief  no 
attempt  is  made  at  exhaustiveness,  an  effort  has  been  made  to  incorporate  at 
least  by  reference  the  most  important  and  recent  of  the  productions. 

It  goes  without  saying  that  it  has  been  sought  to  embody  in  the  presentation 
the  best  that  can  be  gathered  from  the  systems  of  the  various  countries  and 
jurisdictions.  There  is  very  little  need,  in  fact  very  little  excuse,  for  original 
thought  in  dealing  with  the  subject.  Every  form  of  solution  that  could  be 
suggested  has  been  subjected  to  experiment  in  some  or  other  jurisdiction  and 
there  is  available  a  mass  of  information  and  experience  which  renders  further 
experiment  along  many  lines  not  only  useless  but  indefensible.  No  proposition 
and  no  view  upon  the  subject  can  be  of  any  great  value  which  is  not  founded 
upon  an  investigation  of  the  different  systems  and  which  does  not  reckon  with 
their  results. 

No  effort  has  been  made  to  prove  that  conditions  under  the  existing  law 
are  unsatisfactory  or  that  a  change  in  the  law  is  necessary.1  This  has  been 
assumed.  Even  the  assumption,  however,  is  more  or  less  superfluous,  because, 
whatever  view  may  be  taken  of  existing  conditions,  the  history  of  the  subject  in 
every  other  country  leaves  no  room  for  doubt  that  some  change  will  be  made  in  the 
law  of  Ontario.  This  brief'  is,  therefore,  addressed  entirely  to  the  question  of 
the  form  which  such  legislation  should  take.  The  brief  has  been  prepared  with 
specific  reference  to  the  Province  of  Ontario,  but  it  has  been  kept  in  mind  that 
the  legislation  adopted  in  recent  years  in  seven  of  the  other  provinces  of  Canada, 
must,  in  the  light  of  uniform  experience  in  other  jurisdictions,  be  regarded  as 
of  a  temporary  character  only,  and  that  the  course  of  legislation  in  the  other 
provinces  will  in  all  probability  be  influenced  by  whatever  action  is  taken  in 
Ontario.  In  fact  the  possibility  has  been  kept  in  view  of  a  homogeneous,  if  not 
a  uni fieri,  scheme  for  the  whole  Dominion.  This  is  a  consummation  theoretically 
attainable  perhaps  by  Dominion  legislation,  but  practically  attainable  probably 
in   no   other  way   than    that    indicated,   namely,   uniform   provincial    legislation. 

1  As  to  this  see  Rep.  Atlantic  City  Conference;  Rep.  Ohio  Com.,  Pt.  I.,  pp.  i-cxiii, 
and  appendices  I  and  II;  Rep.  Que.  Com.;  Rep.  111.  Com.;  Rep.  N.  J.  Com.;  Rep.  Wash. 
Com.;  Rep.  Fed.  Com.  U.  S.;  Rep.  Mich.  Com. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  57 


CONDENSED  SUMMARY  OF  BRIEF. 
Statement  of  Principles. 

In  framing  a   system   of   workmen's   compensation,   the    following   principles 

should,  it  is  submitted,  be  kept  in  view  and  so  far  as  possible  observed. 

First:  For  reasons  both  humanitarian  and  economic  the  prevention  of  acci- 
dents should  be  a  prime  consideration  in  any  scheme  of  workmen's  compensation, 
and  no  system  can  be  satisfactory  which  will  not  tend  to  produce  the  maximum  of 
effort  and  result  in  conserving  the  life,  health,  and  industrial  efficiency  of  the 
workman. 

Second :  Relief  should  be  provided  in  every  case  of  injury  arising  out  of  in- 
dustrial accident.  Such  relief  should  not  be  contingent  upon  proof  of  fault  on 
the  part  of  the  employer,  but  gross  carelessness,  drunkenness,  or  intentional  wrong 
on  the  part  of  the  workman  should  be  penalized  in  some  way. 

Third:  The  system  of  relief  should  be  adapted  to  cover  wage-workers  in  every 
industry  or  calling  involving  any  occupational  risk,  and  should  not  be  confined  to 
such  industries  as  railroading,  manufacturing,  building,  etc. 

Fourth :  The  relief  should  be  as  far  as  practicable  by  way  of  substitution  for 
the  wages  of  which  the  injured  workman  and  his  dependants  are  deprived  by  the 
injury.     It  should,  as  a  rule,  be  periodical  and  not  in  a  lump  sum. 

Fifth :  The  relief  should  be  certain.  It  should  not  depend  upon  the  continued 
solvency  of  the  employer  in  whose  service  the  injury  was  sustained. 

Sixth  :  The  amount  of  compensation  should  be  definite  and  ascertainable  both 
to  the  workman  and  to  the  employer.  The  system  should  entirely  displace  the  pre- 
sent method  of  compensation  by  an  action  for  damages,  and  the  employer  should 
not  be  subjected  to  any  further  or  other  liability  except  in  cases  of  gross  careless- 
ness or  intentional  wrong  on  the  part  of  the  employer. 

Seven  tli  :  The  funds  for  relief  should  be  provided  by  joint  contributions  from 
employers,  workmen,  and  the  province.  Emplo}rers  and  workmen  should  pay  in 
such  proportions  as  represent  the  number  of  accidents  occurring  by  reason  of  the 
hazard  of  the  industry  and  the  fault  of  the  employer  on  the  one  hand  and  the 
fault  of  the  workman  on  the  other.  The  province  should  contribute  an  amount 
representing  approximately  the  cost  of  administration. 

Eighth  :  The  system  of  relief  should  be  such  as  to  secure  in  its  administration 
a  maximum  of  efficiency  and  economy,  and  as  large  a  proportion  as  possible  of  the 
money  contributed  should  be  actually  paid  out  in  compensation. 

Ninth  :  The  procedure  for  the  adjustment  of  claims  should  be  as  far  as  pos- 
sible dissociated  from  the  regular  courts  of  law.  It  should  be  simple  and  calcu- 
lated to  involve  in  its  operation  a  minimum  of  friction  between  employer  and  em- 
ployee. 

Tenth:  The  system  of  compensation  should  be  directly  associated  with  a 
system  of  inspection  with  a  view  to  the  prevention  of  accidents  and  a  system  of 
prompt  and  expert  medical  attendance  to  mitigate  the  effect  of  the  injuries. 

Eleventh  :  The  system  should  be  such  as  to  secure  as  liberal  a  measure  of  relief 
as  possible  without  undue  strain  upon  industry. 

Twelfth :  The  system  should  be  such  as  to  afford  some  promise  of  permanency. 


58  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


Analysis  of  Different  Systems  of  Workmen's  Compensation. 

Practically  all  workmen's  compensation  legislation  is  an  effort  to  embody  in 
some  form  and  in  some  degree  the  second  of  the  principles  above  laid  down,  namely, 
that  a  wage-worker  should  receive  compensation  or  relief  in  case  of  injury  occurring 
in  the  course  of  his  employment,  regardless  of  questions  of  fault  on  the  part  of  his 
employer  or  contributory  fault  on  the  part  of  the  workman.  This  has  been  called 
the  principle  of  "professional  risk."1  It  is  based  upon  the  theory  that  the  cost 
of  human  wear  and  tear  should  be  thrown  largely,  if  not  wholly,  upon  the  industry 
and  included  in  the  price  charged  to  the  consumer  for  the  product  of  the  industry. 
To  what  extent  this  theory  is  equitable  and  economically  sound,  and  to  what  extent 
it  conflicts  with  the  legal  doctrine  that  no  man  should  be  responsible  for  something 
not  his  fault  need  not  be  discussed  here.  The  theory  is  the  basis  of  all  workmen's 
compensation  legislation. 

The  different  compensation  systems  of  the  world  exhibit  three  distinct  methods 
of  applying  the  theory  of  professional  risk.  These  methods  may  respectively  be 
termed  the  individual  liability  method,  the  collective  liability  method,  and  the  state 
liability  or  state  insurance  method.  Every  system  in  the  world  can  be  classified 
under  one  or  other  of  these  heads. 

(a)  Individual  Liability:  Under  an  individual  liability  system  the  obliga- 
tion to  compensate  workmen  is  thrown  upon  the  individual  employer  as  an  element 
of  the  relationship  of  employer  and  employee.  The  law  includes  a  term  in  every 
contract  of  employment  by  which  the  employer  assumes  an  obligation  more  or  less 
extensive,  to  indemnify  the  workman  for  injuries  received  in  the  course  of,  or  in 
connection  with,  the  employment.  The  injured  employee  looks  for  his  relief  to  the 
employer,  who  thus  becomes  an  individual  insurer  of  the  workman  against  accidents. 
The  principle  of  individual  liability  is  illustrated  in  the  English  Workmen's  Com- 
pensation Act  and  in  the  Acts  in  force  in  some  of  the  provinces  of  Canada.  Under 
these  Acts  employers  are  required,  regardless  to  a  large  extent  of  questions  of  fault, 
to  compensate  their  workmen  for  injuries  arising  out  of,  or  in  the  course  of,  the 
employment.  Employers  are  of  course  permitted  and  encouraged  to  insure  them- 
selves against  the  liability  by  some  form  of  insurance,  but  the  initial  liability  rests 
upon  the  individual  employer  and  the  insurance  effected  is  uniformly  for  the 
purpose  of  protecting  the  employer  against  this  liability  and  not  for  the  purpose  of 
insuring  the  workman  against  accidents.2 

(b)  Collective  Liability:  Under  this  method  the  liability  to  compensate  the 
workman  is  thrown  upon  employers  collectively  in  groups,  according  to  the  hazard 
of  the  industry.  Employers  are  encouraged  or  compelled  to  combine  in  associations 
for  the  purpose  of  insuring  their  workmen  against  accidents  and  providing  the 
necessary  funds.  The  injured  workman  looks  for  his  compensation,  not  to  the  in- 
dividual employer,  but  to  the  association  or  the  fund.  The  principle  of  collective 
liability  is  illustrated  in  the  German  system,  under  which  employers  are  grouped 
by  industries  under  state  compulsion  and  supervision,  and  are  required  to  provide 
funds  for  compensation  or  relief  for  the  injuries  occurring  in  their  respective 
'/roups.       The  collective  liability  system   has  been  adopted   in   some  form  by  the 

'See  Walton,  p.  22;  and  see  post,  p.  89,  for  further  discussion. 

2  See  further,  post,  p.  103,  for  distinction  between  accident  insurance  and  employers' 
liability  insurance. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  59 

majority  of  the  countries  of  Europe  and  some  of  the  States  of  the  American  Union, 
but  the  German  system  being  the  oldest  and  the  most  elaborately  and  scientifically 
developed  is  usually  cited  as  the  type. 

(c)  State  Liability:  Under  this  method  the  state  itself  assumes  the  obliga- 
tion to  pay  compensation,  the  cost  being  levied  upon  employers,  or  employers  and 
workmen,  through  the  agency  of  a  state  insurance  department.  The  workman 
looks  for  his  compensation  directly  to  the  state  department  and  the  compensation 
is  provided  out  of  a  fund  levied  in  the  form  of  insurance  premiums  upon  the  pay 
roll  of  industries.  This  method  is  illustrated  in  the  Act  recently  adopted  by  the 
State  of  Washington.1 

The  method  of  individual  liability  has  been  pronounced  with  singular  unani- 
mity by  those  who  have  investigated  the  operation  of  the  different  systems  as 
a  failure.2  It  involves  the  violation  of  almost  all  of  the  twelve  principles  above 
laid  down  as  representing  the  chief  elements  of  a  satisfactory  compensation 
system.  The  individual  liability  systems  have  not  tended  to  any  appreciable 
degree  to  reduce  the  number  of  industrial  accidents  or  to  conserve  the  life,  health 
and  efficiency  of  the  workman.  They  operate  with  particular  hardship  upon 
small  employers  and  older  and  partially  disabled  workmen.  They  cannot  be  well 
operated  so  as  to  secure  periodical  payments  as  opposed  to  lump  sum  payments 
of  compensation.  They  do  not  afford  any  assurance  that  the  compensation  pay- 
ments will  lie  made,  or  continue  to  be  made,  there  being  no  guarantee  of  solvency 
on  the  part  of  those  charged  with  payment.  They  have  proven  wasteful  in  the 
extreme,  a  large  percentage  of  the  money  paid  out  in  contributions  by  way  of 
employers'  liability  insurance  premiums  being  taken  up  by  commissions,  expenses 
of  litigations,  profits,  etc.  The  workman  is  obliged  to  resort  to  legal  or  quasi- 
legal  process  to  enforce  his  claim  against  the  employer.  The  settlement  of  each 
claim  involves  a  direct  contest  between  workman  and  employer,  the  latter  being 
supported  by  the  employers'  liability  insurance  company  with  its  superior  facili- 
ties for  contesting  claims.  The  individual  liability  systems  represent  the  greatest 
and  most  direct  strain  upon  industry.  They  are  admitted  by  nearly  all 
observers  to  represent  merely  a  stage  in  the  development  of  a  satisfactory  com- 
pensation system  and  involve  in  the  meantime  unsatisfactory  relations  between 
employers  and  workmen  and  unsatisfactory  economic  conditions  to  the  community 
at  large. 

The  collective  liability  method  as  applied  in  Germany  and  other  countries 
of  Europe,  as  well  as  some  of  the  American  States,  is  generally  regarded  as  a 
success  in  its  practical  working  out.  The  systems  of  these  jurisdictions  are 
found  to  embody  in  a  large  measure  the  elements  above  outlined  as  constituting  a 
satisfactory  compensation  system.  The  type  system,  that  of  Germany,  is  the  out- 
standing example  of  a  successful  solution  of  the  problem :  and  criticisms  upon  it  are 
directed  almost  solely  to  defects  in  the  details  and  administrations  of  the  system." 

The  state  insurance  system  as  applied  in  the  State  of  Washington  and  other 
states  as  well  as  a  number  of  other  European  countries,  has  the  approval  of  a 
large  majority  of  the  investigators  and  writers  upon  the  subject.     Constitutional 

1  It  has  been  pointed  out  that  the  Washington  system  is  more  corr^tly  described 
as  a  system  of  collective  insurance  under  state  administration,  post,  p.  122. 

2  See  P.  &  D.,  14;  S.  &  E.,  250;  Rep.  Fed.  Com.  U.S.,  281;  Rep.  Ohio  Com.  Pt.  1,  p.  16; 
and  post,  p.  93,  for  full  discussion. 

'See  post,  p.  129. 


60  CANADIAN  MANUEACTUREES'  ASSOCIATION:  No.  65 

and  other  practical  difficulties  have  interfered  with  the  introduction  of  such  a 
system  in  many  jurisdictions  where  it  was  otherwise  regarded  as  desirable.1  The 
experience  of  those  jurisdictions  which  have  adopted  the  system  has  called  forth 
enthusiastic  commendation  from  employers  and  workmen  as  well  as  the  general 
public,  and  has  given  every  reason  to  believe  that  such  a  system  affords  a  satis- 
factory solution  of  the  problem.2 

The  greatest  difficulty  in  the  way  of  the  introduction  of  an  Act  like  that  of 
the  State  of  Washington  is  the  immediate  additional  expense  to  the  employer 
represented  by  a  probable  rise  of  from  100  to  1,000  per  cent,  over  the  cost  under 
existing  conditions.  Most  large  employers  cover  their  risk  under  the  present 
laws  by  employers'  liability  insurance.  While  the  rates  for  this  insurance  are 
very  high  relatively  to  the  benefits  conferred  by  it  upon  injured  employees,  the 
introduction  of  a  system  like  that  of  Washington  would  involve  an  additio'  a! 
expense  to  employers  representing  a  considerable  disturbance  of  economic  conditions 
to  the  prejudice  of  both  employers  and  workmen.  The  same  result  would  of  course 
follow  the  introduction  of  an  individual  liability  system  such  as  that  of  England. 
in  which  latter  case  the  expense  of  conferring  corresponding  benefits  would  be 
much  larger  owing  to  the  large  percentage  of  waste.3 

There  is  a  plan  under  which  a  collective  or  state  insurance  system  could  be 
established  at  an  immediate  annual  cost  not  greater  than,  and  in  fact  in  many 
industries  considerably  less  than,  that  of  the  present  liability  insurance  rates. 
This  plan  may  be  called  the  current  cost  plan.4  Under  it  instead  of  capitalizing 
the  periodical  payments  due  to  the  injured  workman  or  his  dependants  and  setting 
aside  at  the  time  of  the  accident  a  lump  sum  to  provide  for  all  future  payments, 
only  the  current  cost  of  meeting  the  annual  payments  would  be  assessed  each 
year  with  a  small  margin  for  an  emergency  reserve  fund.  The  annual  assessments 
would  increase  as  the  number  of  dependants  increased,  and  the  annual  rate  would 
reach  its  maximum  only  after  a  period  of  twenty-five  or  thirty  years.  This  was 
the  actuarial  plan  adopted  in  Germany.5  It  represents  a  minimum  strain  upon 
present  industry  and  does  not  involve  the  shock  to  the  economic  system  which 
would  be  incidental  to  the  adoption  of  an  extensive  scheme  of  immediate  capitaliza- 
tion. 

Recommendations. 

We  recommend  the  establishment  of  either  a  collective  liability  or  a  state 
insurance  system.  An  individual  liability  system  will  not  he  acceptable  to  the 
manufacturing  interests  of  the  province. 

We  are  prepared  to  lend  every  assistance  to  the  organization  of  an  indepeiuh  nt, 
non-state,  collective  system,  but  we  believe  that  under  all  the  circumstances  the 
must  economical  and  satisfactory  plan  for  the  Province  of  Ontario  is  a  collective 
system  under  provincial  administration  and  control. 

We  recommend  the  creation  of  an  independent,  non-political,  provincial  insur- 
ance department  administered  by  a  Board  of  three  commissioners.  This  "Board 
should  provide  for  the  payment  of  all  claims  for  compensation  out  of  a  fund   to 


'  See  Rep.  Minn.  Com.,  154. 

2  See  post,  p.  94. 

3  See  post,  p.  105. 

4  See  post,  p.  108. 

'•  See     article     by     Dr.     Zacher,     in     "Handworterbuch     der     Staatswissenscbaften,' 

Vol.  VIII.  p.  65. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  61 

be  raised  by  premiums  Levied  upon  the  pay-roll  oi"  industries  classilied  according  to 
hazard.  The  Board  should  be  vested  with  full  jurisdiction  to  adjust  all  claims 
for  compensation  upon  sworn  reports  of  the  different  parties  interested.  It  should 
have  power  to  take  evidence,  to  make  independent  investigations,  and  to  re-hear 
and  re-adjust,  its  decisions  being  final  upon  questions  of  fact  and  subject  to 
appeal  only  in  questions  of  law. 

The  Board  should  also  have  power  to  enforce  preventive  regulations,  and 
provision  should  be  made  for  the  advisory  co-operation  of  representatives  of  dif- 
ferent classes  of  industries  in  the  framing  of  such  regulations.  The  Board  should 
also  have  charge  of  the  adjustment  of  insurance  rates  and  the  classification  of 
industries. 

The  annual  assessments  of  insurance  premiums  should  be  levied  upon  the 
basis  of  the  current  cost  of  compensation  payments  with  a  margin  for  an  emergency 
fund.  A  percentage  of  the  premium  rates  representing  the  proportion  of  the 
accidents  due  to  the  fault  of  the  workman  should  be  chargeable  at  the  option  of 
employers,  and  upon  due  notice,  to  the  workmen,  and  deducted  by  employer-  from 
the  wasres  of  the  workmen. 


DISCUSSION  OF  PEINCIPLES. 

In  the  following  pages  the  principles  and  recommendations  given  in  outline 
above  are  briefly  discussed.  The  views  presented  and  the  conclusions  drawn  are 
in  every  case  supported  by  evidence  and  expert  opinion  representing  the  experience 
of  other  jurisdictions.  It  is  considered  of  the  utmost  importance  that  any  legisla- 
tion adopted  should  avoid  a  repetition  of  the  mistakes  and  weaknesses  of  other 
systems.  Fortunately  the  legislatures  of  Canada  are  not  subject  to  constitutional 
lestrictions  corresponding  to  those  which  hamper  some  jurisdictions  in  dealing 
with  the  subject.  There  is  therefore  every  reason  why  the  system  adopted  by  the 
Province  of  Ontario  should  represent  the  accumulated  experience  of  other  juris- 
dictions as  well  as  the  wisdom  and  ingenuity  of  our  own. 


62  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


DISCUSSION  OF  PRINCIPLES.1 

First:  For  reasons  both  humanitarian  and  economic  the  prevention  of  acci- 
dents should  be  a  prime  consideration  in  any  scheme  of  workmen's  compensation, 
and  no  system  can  be  satisfactory  which  will  not  tend  to  produce  the  maximum 
of  effort  and  result  in  conserving  the  life,  health  and  industrial  efficiency  of  the 
workman. 

This  principle  involves  an  immediate  departure  from  the  older  legal  theories 
of  employers'  liability  for  injuries  to  workmen.  The  question  of  accident  pre- 
vention must  be  considered  one  of  paramount  importance  in  relation  to  a  work- 
men's compensation  system  because  of  the  fact  that  the  different  systems  of  c  >m- 
pensation  vastly  differ  in  their  effect  in  inducing  preventive  activity  and  care 
on  the  part  of  the  employer  and  employee.  In  its  older  legal  aspect  workmen's 
compensation  was  largely,  if  not  wholly,  a  matter  of  making  good  by  a  money 
payment  of  damages,  for  injuries  sustained  by  the  workman2.  In  its  modern 
economic  aspect  the  question  of  conserving  industrial  efficiency  by  preventing 
accidents  and  mitigating  their  effect  is  a  vital,  if  not  the  most  vital  consideration3. 

Of  the  possibility  of  a  reduction  in  the  industrial  accident  rate  there  is  not 
the  slightest  doubt.  Estimates  and  statistics  point  to  a  possible  saving  of  as  high 
as  fifty  per  cent,  in  the  industrial  accident  rate  by  systematic  and  scientific 
methods4.  The  theory  of  those  who  who  advocate  an  individual  liability  system 
is  that  by  throwing  the  burden  of  accidents  directly  and  heavily  upon  the  individual 
employer  he  will  be  induced  to  adopt  means  of  prevention.5  But  there 
can  no  longer  be  any  doubt  as  to  the  futility  of  a  system  of  individual  liability 
as  a  means  of  inducing  efficient  preventive  activity.  While  it  may  have 
been  one  of  the  objects  in  the  minds  of  the  framers  of  liabililty  systems  such  as 
that  of  the  Chamberlain  Act  of  1880  in  England  to  reduce  the  number  of  accidents 
by  penalizing  the  employer  with  the  increased  liability,  experience  under  these 
systems  has  not  justified  any  such  expectation,  and  later  observers  have  in  fact 
failed  to  give  these  systems  credit  for  even  the  purpose  of  reducing  the  number 
of  accidents.  Thus  the  Commissioners  of  the  National  Association  of  Manu- 
facturers say,8  "  the  British  policy  bears  no  relation  to  accident  prevention,"  and 
of  the  Act  of  1897  the  Parliamentary  Committee  reporting  in  1904  said,7  "  no 
evidence  has  been  brought  before  us  which  enables  us  to  find  that  any  great  im- 
provement in  the  direction  of  safety  is  to  be  placed  to  the  credit  of  this  Act. 
Indeed  some  of  the  evidence  points  in  the  opposite  direction."  While  there  appears 
to  have  been  on  the  whole,  since  the  introduction  of  the  English  Workmen's  Com- 

1  Compare  enunciation  of  principles,  S.  &  E.,  28;   and  Rep.  Mich.  Com.,  33. 

2  See  statement  of  J.  A.  Emery,  Rep.  Fed.  Com.  U.S.,  1088. 

8F.  &  D.,  140;  S.  &  E.,  11,  20,  128,  277.  Art.,  by  Louis  Brandeis,  "Outlook,"  June 
10th,  1911,  post,  p.  123;   Bulletin  78,  U.S.  Bur.  Lab.,  458;   Rep.  Fed.  Com.  U.S.,  764. 

4  See  also  art,  by  Fredk  L.  Hoffman,  Bulletin  78  U.S.,  Bur.  Lab.,  p.  458;  S.  &  E„ 
pp.  66,  99,  314;  also  Rep.  Fed.  Com.  U.S.,  668,  also  statement  of  M.  M.  Dawson,  Rep. 
Fed.  Com.  U.S.,  104-5. 

B  This  theory  was  pushed  to  its  logical  conclusion  in  a  statement  before  the  Federal 
Commission  of  the  United  States  as  remarkable  for  cogency  of  facts  and  quotations,  as 
for  confusion  of  logic  and  terminology.  The  witness  in  question  advocated  a  system 
of  drastic  employers'  liability,  with  prohibition  of  liability  insurance,  claiming  that  to 
allow  the  employer  to  insure  was  to  ward  off  the  incentive  of  preventive  care. 

'S.  &  E.,  11. 

'Cd.  2208,  22,  23. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  63 

pensation  Act,  some  diminution  in  the  number  of  industrial  accidents,  the  writers 
and  investigators  concur  in  refusing  to  credit  this  to  the  system  of  compensation 
established  by  the  Act.1 

On  the  other  hand  the  collective  liability  systems  have  to  their  credit  a 
marked  success  in  inducing  systematic  effort  in  the  matter  of  accident  prevention. 
The  German  system  with  its  elaborate  statistics  exhibits  perhaps  the  most  striking 
results  but  a  corresponding  measure  of  success  has  attended  the  operation  of  other 
collective  systems.  There  is  absolute  unanimity  amongst  the  writers  and  inves- 
tigators in  ascribing  to  the  German  system  an  immense  superiority  over  the  English 
system  in  reducing  the  industrial  accident  rate;2  and  the  success  of  the  German 
system  is  due  very  largely  to  the  co-operative  effort  evoked  by  the  classified 
organization  of  employers. 

There  is  every  reason  to  anticipate  for  the  Act  of  the  State  of  Washington 
a  similar  measure  of  success  in  preventing  the  occurrence  of  accidents."  The 
explosion  in  the  Chehalis  Powder  works4  soon  after  the  Washington  Act  was 
brought  into  force  serves  to  illustrate  the  probable  effect  of  the  Washington  system. 
The  accident  had  occurred  in  one  of  the  explosives  works  of  the  State  and  was 
due  largely  to  the  use  of  an  ingredient  in  the  manufacture  of  powder  which 
increased  the  hazard  and  which  the  other  powder  plants  for  this  reason  did  not 
employ.  The  accident  resulted  in  compensation  claims  amounting  to  over  $10,000, 
which  amount  is  of  course  to  be  borne  by  the  manufacturers  of  explosives  collect- 
ively. It  needs  no  argument  to  demonstrate  the  probability  that  the  influence 
of  those  manufacturers  of  explosives  who  do  not  employ  the  dangerous  ingredient 
will  be  exerted  to  have  its  use  discontinued. 

There  is  every  reason  to  believe  that  results  similar  to  those  in  Germany 
would  be  attained  in  this  province  under  the  proposed  system  of  assessing  employers 
in  groups.  If,  as  proposed,  facilities  are  afforded  for  the  formation  of  employers' 
associations,  these  will  beyond  doubt  have  a  large  influence  in  reducing  the  accident 
rate  by  making  rules,  standardizing  machinery  and  otherwise  promoting  safety;5 
but  even  were  'Such  facilities  omitted  employers  would  probably  find  means, 
within  the  different  groups,  of  combining  for  co-operative  effort  in  accident 
prevention. 

Another  factor  in  the  matter  of  accident  prevention,  one  which  does  not 
appear  on  a  casual  examination  to  have  any  bearing  upon  it,  but  which  has  been 
found  to  be  in  fact  of  the  greatest  importance,  is  the  question  of  the  actuarial 
plan  adopted  in  compensation  insurance.  The  subject  is  discussed  in  succeeding 
page?.6  but  it  should  be  observed  here  that  one  of  the  greatest  means  of  inducing 
preventive  activity  is  the  rapid  rise  in  insurance  rates  involved  in  the  current 
cost  plan  of  insurance. 

It  is  submitted  that  the  greatest  possible  care  should  be  given  to  the  selection 
of  those  features  of  other  systems  which  have  been  found  to  exercise  any  influence 
in  promoting  the  prevention  of  accidents,  and  that  other  considerations  must 
wherever  necessary  give  way  to  this  feature. 

1  Rep.  Fed.  Com.  U.S.,  116. 

2S.  &  E.,  99;  Rep.  Fed.  Com.  U.S.,  104,  1,432;  F.  &  D.,  138;  Cd.  2,458,  p.  33. 

8  See  Interim  Rep.  Ont.  Com.,  175,  and  post,  p.  128. 

4  See  account  of  accident,  post,  p.  134;  see  also  correspondence,  with  reference  to 
Chehalis  explosion,  post,  p.  124. 

5  S.  &  E.,  285.    See  Interim  Rep.  Ont.  Com.  328,  344. 
"  See  post,  p.  108. 


64  CANADIAN  MAXUEACTUEEES'  ASSOCIATION:  Xo.  65 


Second:  Relief  should  be  provided  in  every  case  of  injury  arising  out  of 
industrial  accident.  Such  relief  should  not  be  contingent  upon  proof  of  fault  on 
the  part  of  the  employer,  but  gross  carelessness,  drunkenness  or  intentional  wrong 
on  the  part  of  the  workman  should  be  penalized  in  some  way. 

Under  the  older  legal  systems,  continental  as  well  as  English,  the  ability 
of  a  workman  to  recover  damages  for  injury  depended  upon  his  ability  to  prove  the 
injury  to  have  been  caused  by  the  fault,  or,  to  use  the  technical  term  of  English 
law,  the  negligence  of  the  employer.  The  rule  as  to  the  liability  of  the  employer1 
was  no  different  from  the  general  rule  applicable  to  all  persons,  namely,  that  a 
man  should  not  be  held  answerable  in  damages  for  something  not  his  fault. 
Attempts  have  been  male  to  reconcile  the  modern  doctrines  of  workmen's  compensa- 
tion with  this  older  principle.  It  has  been  implied,  if  not  expressly  urged,  that  the 
employer,  having  brought  into  existence  and  operation  modern  industrial  appliances 
and  methods,  has  created  conditions  which  should  be  imputed  to  his  fault,  and 
that  he  should  therefore  be  held  responsible  for  the  results  of  these  conditions.1 
This  view  assumes  two  untenable  propositions,  namely,  that  modern  indust'ial  con- 
ditions are  created  by,  and  for  the  exclusive  benefit  of,  employers,  and  that 
industrial  accidents  are  due  entirely  to  these  conditions. 

The  fact  is  that  the  modern  theories  of  workmen's  compensation  are  based 
upon  grounds  of  practical  expediency  and  not  upon  notions  of  ab -tract  justice. 
The  principal  grounds  are :  In  the  first  place,  the  employer  is  considered  to  be  in 
a  position  to  do  for  the  workman  what  the  workman  cannot,  or  will  not,  do  for 
himself,  namely,  insure  the  workman  against  accidents;  for  even  with  an  increase 
in  wages  corresponding  to  the  insurance  premium  necescary  to  insure  himself, 
tbe  improvidence  of  the  workman  would  preclude  any  hope  of  his  voluntarily 
assuming  the  burden.  In  the  second  place,  the  employer  being  in  the  position  of 
entrepreneur  is  considered  to  have  facilities  for  throwing  the  cost  of  compensa- 
tion upon  the  product  and  to  collect  it  from  the  consumer.2  To  these  two  con- 
siderations there  may  be  added  a  third,  namely,  that  the  money  wasted  in  disputes 
over  questions  of  fault  in  individual  cases  would  go  a  long  way  towards  providing 
for  compen=ation  where  no  fault  lay  against  the  employer. 

Without  detracting  from  the  weight  of  these  considerations  it  may  b.>  pointed 
out  that  they  do  not  stand. alone  or  unqualified  and  that  the  considerations  of 
justice  which  formerly  governed  are  not  abrogated.  It  is  no  more  just  now  than 
formerly  that  an  individual  employer  should  be  held  responsible  for  something 
not  his  fault,  nor  that  a  workman  should  receive  damages  for  injuries  due  to  his 
own  fault.  It  is  neither  just  nor  expedient  that  a  workman  should  not  have  his 
owl]  carelessness  brought  home  to  him.  And  there  is  a  further  consideration  of 
expediency  requiring  the  enlistment  of  the  workmen's  pecuniary  interest  in  pre- 
venting the  occurrence  of  injuries.  In  addition  to  this,  practical  expediency,  as 
well  as  justice,  demand  that  the  burden  thrown  upon  the  employer  should  he 
home   by   employers   collectively   and    not   individually.     With    regard    also   to   the 

1  Under  a  rule  analogous  to  that  in  the  old  case  of  Rylands  v.  Fletcher,  so,  e.g.. 
Mr.  Asquith,  as  Home  Secretary,  in  1893,  used  the  following  words:  "When  a  person, 
on  his  own  responsibility,  and  for  his  own  profit,  sets  in  motion  agencies  which  create 
risks  for  otlhers,  he  ought  to  be  civilly  responsible,  for  the  consequences  of  what  he 
does."  And  see  similar  argument,  Rep.  Fed.  Com.  U.S.,  197.  This  theory  was  the  basis 
of  some  of  the  earlier  legislation  of  Germany  (e.g..  The  Prussian  Railway  Law,  1838), 
but  was  soon  abandoned. 

2  See  F.  &  D.,  8;  Rep.  Fed.  Com.  U.S.,  1088. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  65 

theory  that,  as  in  the  case  of  hroken  down  and  worn  out  machinery,  so  in  the  case 
of  the  injury  or  death  of  workmen,  the  loss  should  be  borne  by  the  employer  and 
added  to  the  cost  of  production  as  incidental  to  modern  industrial  methods,  it  may 
be  observed  that  the  analogy  may  be  easily  overdrawn.  The  workman,  is  not  a 
machine.  An  injured  or  worn  out  machine  may  be  replaced  or  repaired  at  a  cost 
that  can  in  most  cases  be  estimated  with  precision  and  the  machine  in  its  injured 
state  is  still  the  property  of  the  employer  and  may  be  sold  and  replaced  by  another, 
for  the  purchase  of  which  the  markets  of  the  world  are  open.  The  freedom  of 
contract  and  volition  on  the  part  of  the  workman  constitutes  a  vital  difference 
between  him  and  the  inanimate  agencies  of  production. 

The  "professional  risk"  theory  imputes,  in  reality,  to  the  relationship  ot 
employer  and  employee  obligations  and  rights  for  which  the  common  law  affords 
no  real  analogy.  These  rights  and  obligations  are  social  in  their  nature  and 
involve  considerations  in  which  the  community  at  large  is  vitally  interested.  A 
workmen's  compensati  n  system  involves  the  merging  of  the  woikmen's  private 
right  of  action  against  the  employer  in  the  larger  right  of  the  general  public  io 
have  the  injured  workman  taken  care  of;  or,  in  another  aspect,  it  merges  the 
private  obligation  of  ithe  employer  to  compensate  the  workman  in  the  larger  obliga- 
tion   to    the    public    of    keeping    the    workman    from    dependence    on    charity.1 

The  socialistic  element  in  workmen's  compensation  legislation  is,  of  course, 
freely  recognized.2  It  was  recognized  by  Bismarck  in  introducing  the  German 
Act  of  18803  and  Joseph  Chamberlain  referring  to  the  English  Act  of  1884,  said: 
"The  Poor-law  is  socialism.  The  Education  Aot  is  socialism.  The  greater  pait 
of  municipal  work  is  socialism,  and  every  kindly  act  of  legislation  by  which  the 
community  has  sought  to  discharge  its  responsibilities  and  its  obligations  to  the 
poor  is  socialism,  but  it  is  none  the  worse  for  that."4  The  great  defect  m  the 
individual  liability  system  is  that  it  seeks  to  operate  a  socialistic  doctrine  with 
inadequate  individualistic  machinery. 

Whatever  economic  arguments  may  be  advanced  for  a  system  of  individual 
liability  it  is  and  will  forever  remain  unjust  that  an  individual  employer  should 
be  responsible  for  injuries  occasioned  to  a  workman  by  the  workman's  own  negli- 
gence, or  the  negligence  of  another  than  the  employer.  The  rule  of  contributory 
negligence  and  the  fellow  servant  rule  as  embodied  in  the  common  law  of  Eng- 
land are  not  unjust.  If  B.,  an  employee  of  A.,  is  injured  by  his  own  negligence 
or  by  the  negligence  of  C,  a  fellow  employee,  there  is  no  shadow  of  a  foundation 
in  justice  for  a  claim  against  A.  for  damages.  In  order  to  see  the  elementary 
relationship  A.,  B.  and  C.  respectively  should  be  considered  as  persons  of  co- 
ordinate rank,  say  three  journeymen  carpenters,  but  the  relationship  of  the  parties 
cannot  and  ought  not  to  be  considered  different  if  A.  is  a  wealthy  corporation. 
The  disease  aimed  at  by  compensation  laws  is  an  economic  condition,  not  a  legal 
wrong,  and  an  individual  liability  law  is  an  attempt  to  do  an  economic  right  by 
doing  a  legal  wrong,  an  attempt  which  experience  in  many  countries  has  proven 
unwise  even  as  a  temporary  expedient. 

The   present  English  Act  represents  the   logical   evolution   of  the  principle. 

1  See  statement  of  R.  J.  Cary,  Rep.  Fed.  Com.  U.S.,  139;  see  also  Laband,  Droit  Public 
de  L  Empire  Allemand,  IV. 

2  See  Brief  of  Carman  P.  Randolph,  Rep.  Fed.  Com.  U.S.,  1428. 

3  See  Rep.  Fed.  Com.  U.S.,  952. 

4  Speech  at  Warrington  on  Sept.  8,  1885.     See  F.  &  D.,  140,  for  answers  to  criticisms 
against  German  system  as  socialistic. 

5    L. 


66  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

adopted  in  the  Act  of  1880,  of  securing  compensation  for  workmen)  by  an  exten- 
sion of  the  personal  liability  of  the  employer.  The  present  English  Workmen's 
Compensation  Act  is  still  in  essence  an  employers'  liability  act  and  is  in  \im  with 
the  older  legislation  of  many  other  countries,  including  Germany. 

These  older  laws  were  directed  towards  the  wiping  out  of  the  so-called 
defences  of  contributory  negligence,  common  employment  and  assumed  risk  which 
stood  in  the  way  of  the  workman's  recovering  compensation  under  the  common 
law,  and  thus  extending  the  liability  of  the  employer.  Experience  soon  showed 
that  with  these  defences  abrogated  a  large  percentage  of  industrial  accidents  still 
remained  uncompensated  as  being  purely  accidental  and  not  attributable  to  fault 
on  the  part  of  anyone.1  Speaking  of  the  earlier  German  law  of  1871,  Dr.  Zacher 
says:  "The  law  did  not  have  the  desired  effect;  it  left  the  vast  majority  of  the 
accidents  (those  occurring  through  the  hazard  of  the  employment,  or  fault  of  the 
workman  or  fellow- workman)  uncompensated  as  before."2  The  Ohio  Commission 
also  found  that  "statistical  investigations  show  that  less  than  twenty  per  cent, 
of  the  workingmen  injured  and  killed  have  a  cause  of  action  at  law;  that  is,  in  less 
than  twenty  per  cent,  of  the  cases  is  the  course  of  injury  attributable  to  the  negli- 
gence of  the  employer  "3  and  that  in  more  than  80  per  cent,  of  all  accidents  to 
workingmen  there  is  no  remedy  at  all.  In  many  jurisdictions  there  still  remains 
a  nominal  reservation  against  the  workman  in  cases  of  gross  carelessness  or  wilful 
misconduct — a  reservation  which  amounts  to  little  or  nothing  in  practice4  but 
is  the  last  vestige  of  the  older  common  law  theory. 

Another  form  of  legislation  in  vogue  in  some  jurisdictions,  involving  a 
further  violation  of  principles  of  natural  justice,  was  directed  towards  shifting 
the  burden  of  proof  from  employee  to  employer,  leaving  it  to  the  latter  to  disprove 
fault.  There  is,  however,  a  marked  tendency  to  disregard  entirely  any  contribu- 
tory cause  on  the  part  of  the  workman  where  the  effect  of  such  a  reservation  would 
be  to  deprive  innocent  dependants  of  compensation,1  the  pervading  thought  in  thus 
sweeping  into  the  net  of  compensation  cases  both  deserving  and  undeserving  being 
that  the  money  which  would  be  consumed  in  litigation  and  otherwise,  over  the 
determination  whether  in  particular  capes  the  compensation  should  or  should  not 
be  paid,  would  suffice  to  meet  the  undeserving  cases. 

With  the  qualifications  above  mentioned,  therefore,  it  is  submitted  that  the 
principle  of  compensating  regardless  of  fault  should  be  recognized  as  the  basis 
of  the  system.  Having  laid  down  the  general  principle,  however,  it  is  necessary 
to  consider  what  means  are  open  to  prevent  an  abuse  of  the  system  by  carelessness 
or  self-inflicted  injury.  Most  systems  withhold  or  reduce  the  compensation  in 
cases  of  injury  arising  out  of  intentional  wrong-doing  or  other  serious  misconduct. 
There  is  no  doubt  that  misconduct  on  the  part  of  a  workman  endangering  his  own 
or  other  workmen's  safety  should  be  brought  home  to  him  individually,  and  this, 
perhaps,  whether  an  injury  has  been  occasioned  to  the  workman  or  not.  Whether, 
if  the  workman  is  injured  in  such  a  case,  the  compensation  should  be  wholly  or 
partially  withheld  mighl  be  left  by  the  Act  for  the  proposed  Commission  to  decide 
in  individual  cases.  Attention  may  he  called  to  the  provision  of  the.  Act  of  the 
State  of  Washington  under  which  for  removing  guards  on  machinery,  etc,  the 
compensation  is  reduced  by  ten  per  cent. 

1  Interim  Rep.  Out.  Com.,  335. 

2  Art.    of    Dr.    Zachor,    in    "Handworterbuch    der    Staatswissenschaften,    Jena.    1911, 
Vol.  VIII. 

8  Rep.  Ohio  Com.,  Pt.  1,  p.  lxxxiii. 

4S.  &  R..  203;   Cd.  2.20S,  p.  65;   F.  &  D.,  11. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  67 

Third:  The  system  of  relief  should  be  adapted  to  cover  wage  workers  in 
every  industry  or  calling  involving  any  occupational  risk,  and  should  not  be 
confined  to  such  industries  as  railroading,  manufacturing,  building,  etc. 

The  experience  of  other  countries  gives  every  reason  to  anticipate  that  any 
system  of  workmen's  compensation  that  may  be  adopted  will  be  ultimately  and 
inevitably  extended  to  include  all  classes  of  wage-workers.  The  English  Act  of 
1897,  which  originally  applied  only  to  seven  groups  of  industries  considered  to  be 
particularly  hazardous,  has  been  gradually  extended  until  practically  all  occupa- 
tions are  now  covered;  although  the  system  established  by  the  Act  was  very  ill- 
adapted  for  such  extension.  A  similar  development  marked  the  history  of  the 
German  law,  which  now  covers  all  occupations.     No  reason  can,   of  course,  be 

adduced  except  that  of  temporary  inexpediency,  for  excluding  wage-Workers  in 
such  industries  as  agriculture  and  horticulture.  The  wage- worker  who  loses  an 
arm  in  a  farm  machine  is  as  much  entitled,  equitably  and  economically,  to  com- 
pensation as  the  workman  who  loses  an  arm  in  a  machine  in  a  factory.  Statistics 
also  show  that  farming  is  one  of  the  most  hazardous  of  all  industries.  In  Germany, 
where  general  conditions  differ  very  little  from  those  of  this  country  either  in  the 
relative  hazard  or  in  the  proportion  of  persons  respectively  engaged  in  the  different 
occupations,  between  40  and  45  per  cent,  of  the  total  number  of  accidents  occur  in 
the  agricultural  and  horticultural  industries.  In  the  schedules  of  accident  insur- 
ance companies  in  this  country  and  in  the  United  States,  farmers  are  classed  as 
extra-hazardous  risks.  Similar  observations  might  be  made  with  respect  to  such 
industries  as  lumbering  and  fishing,  although  these  occupations  do  not  engage 
anything  like  a  similar  proportion  of  workmen.  It  is  a  matter  for  careful  con- 
sideration that  any  system  that  may  be  adopted  shall  be  one  that  will  fairly  lend 
itself  for  ultimate  extension  to  all  classes  of  industries. 

At  the  outset,  and  in  order  to  obviate  too  great  complexity  in  the  inception 
of  the  system,  it  might  be  well  to  include  in  the  system  only  certain  classesof 
employers  and  only  employers  of  a  certain  stated  number  of  persons,  say  three 
or  five;  but  the  system  should  be  so  framed  as  to  permit  readily  of  extension  to 
the  smaller  employers  and  to  all  occupations. 

Fourth :  The  relief  should  be  as  far  as  practicable  by  way  of  substitution  for 
the  wages  of  which  the  injured  workman  and  his  dependants  are  deprived  by  the 
injury.     It  should  as  a  rule  be  periodical  and  not  in  a  lump  sum. 

The  consensus  of  opinion  amongst  authorities  on  workmen's  compensation  is 
in  favor  of  this  principle.1  Wagc-workcs  are,  as  a  class,  unaccustomed  to  the 
handling  of  large  sums  of  money  and  where  compensation  is  paid  in  lump  sums 
it  is  liable  to  be  dissipated  through  extravagance  or  improvident  investment.' 
Experience  in  the  United  States  and  under  the  present  English  Act  has  shown 
also  that  where  compensation  is  paid  in  lump  sums  a  much  larger  proportion  is 
'consumed  in  legal  expenses  than  would  be  under  a  system  of  periodical  pay- 
ments.3    The  prospect  of  a  lump  sum  payment  as  the  probable  result  of  an  acci- 

•See  F.  &  D.,  23;  24th  Rep.  U.S.  Bur.  Lab.,  40;  Rep.  Fed.  Com.  U.S.,  887,  943;  Cd. 
2208,  pp.  68,  86;  Cd.  2458,  p.  25. 

2  The  Fabian  Society  suggests  that  Compensation  should  always  be  in  the  form  of 
pensions;  because  of  the  risk  of  investment  by  workmen.  Prof.  Mavor's  Rep.  (1900), 
p.  25:  see  also  Rep.  Conf.  Com.,  64;  Cd.  2208,  p.  87;  Rep.  Fed.  Com.  U.S.,  Ill,  279. 

8  Rep.  Conf.  Com.,  65.    Bulletin  des  Assurances  Sociales  (1910),  Pt.  I.,  p.  136. 


68  CANADIAN  MANUFACTUEEES'  ASSOCIATION:  No.  65 


dent  is  also  a  larger  inducement  to  self-inflicted  injury  than  the  periodical  pay- 
ment of  a  proportion  of  wages.  Experience  has,  in  fact,  shown  that  most  of  the 
proven  cases  of  self-injury  have  been  occasioned  by  the  need  or  desire  for  an 
immediate  sum  not  available  by  way  of  wages.  It  has  been  urged  also  that  the 
payment  of  the  lump  sum  creates  an  inducement  for  the  workman  to  live  in  idle- 
ness while  his  funds  last  instead  of  going  back  to  work  and  earning  what  he  can.1 
Finally,  except  in  the  case  of  the  death  of  an  injured  workman  it  is  impossible 
to  estimate  accurately  the  extent  of  the  injury.  The  fixing  of  compensation  by 
arbitral y  assessment  on  the  basis  of  an  anticipate;!  peiicd  of  incapacity  leaves  room 
for  the  danger  that  the  period  has  been  under-estimated,  and  the  danger,  equally 
to  be  guarded  against,  that  it  has  been  over-estimated.  Both  these  difficulties  are 
obviated  by  a  system  of  periodical  payments.  Even  the  English  Act  provides  for 
periodical  payments  in  certain  cases.  Where  injuries  result  in  disablement  the 
compensation  is  in  the  form  of  weekly  payments  on  the  basis  of  half  the  impair- 
ment of  the  earning  capacity.  Provision  is  made,  however,  for  the  commutation 
of  these  weekly  payments  and  as  a  matter  of  fact  they  are  in  most  cases  com- 
muted.2 This,  of  course,  nullifies  to  a  large  extent  the  intention  of  the  Act,  but 
some  provision  for  commutation  is  almost  indispensable  in  an  individual  liability 
system  since  the  obligation  of  paying  pensions  for  a  period  of  years  should  create 
an  intolerable  burden  for  most  employers3  and  add  to  the  insecurity  of  the  work- 
man. This  latter  feature  was  recognized  in  England  by  making  provision  for  the  pur- 
chase of  Government  annuities  in  commutation  of  periodical  compensation  payments, 
which  piovision  in  itself  constitutes  the  embryo  of  a  state  insuiance  system,  and 
the  inclusion  of  the  principle  of  periodical  payments  even  in  its  attenuated  form 
in  the  English  Act  shows  how  far  the  English  Act  has  departed  from  the 
"wergeld"  theory  under  which  the  damages  payable  for  injuries  were  regard: d 
as  commutation  of  the  retribution  which  tne  injured  person  or  his  family  was 
considered  entitled  to  mete  out  to  the  injurer. 

Of  the  'German  system  Messrs.  Schwedtman  &  Emery  say :  "  The  advantage 
of  weekly  pensions  for  injured  workers  or  dependants  as  compared  with  lump 
sum  payments  is  so  thoroughly  fixed  in  the  minds  of  German  theoretical  and  prac- 
tical experts  that  it  is  impossible  to  find  a  single  advocate  of  lump  sum  pay- 
ments.''3 Speaking  for  the  American  Federation  of  Labor  before  the  Federal 
Commission  Mr.  Samuel  Gompers  said :  "  I  can  see  that  there  may  possibly  come 
a  time  during  the  life  of  a  totally  incapacitated  workman,  his  condition  being 
due  to  an  accident,  when  a  lump  sum  might  be  of  some  advantage  to  him,  but  I 
think  it  is  of  much  greater  advantage  to  him  and  his  dependants  and  to  society  to 
avoid  risks  of  a  failure  resulting  from  the  investment  of  a  lump  sum.  It  wou'd 
be  better  and  safer  for  him  and  his  dependants  and  for  society  if  he  were  for  his 
entire  life  time  saved  from  charity  or  pauperism.  While  it  is  true  that  one  might 
occasionally  achieve  a  financial  competence  by  reason  of  a  timely  investment  of  a 
lump  sum  of  money,  the  chances  are  the  other  way.  I  believe  that  the  purpose 
of  compensation  is  not  necessarily  to  afford  the  opportunity  even  for  successful 
entrance  into  business,  but  it  is  primarily  to  secure  for  the  injured  or  the  work- 
man killed,  either  for  himself  in  the  first  instance  or  his  family  in  every  instance, 

'Rep.  Conf.  Com.,  65;  Bulletin  des  Assurances  Sociales  (1910),  Pt.  III.,  p.  685. 

2  See  Rep.  Fed.  Com.  U.S.,  Ill,  112,  676. 

3  See  Rep.  111.  Com.,  29. 
4S.  &  E.,  49,  206. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  69 


the  oppoitunity  of  being  saved  against  charity  or  pauperis;!).  Once  the  lump  sum 
is  paid  and  invested  in  a  small  business,  or  otherwise,  and  it  is  dissipated  by  a 
failure  to  secure  success,  the  maimed  man  or  las  family  or  dependants  are  no 
longer  entitled — and  justly  so — to  payments  on  the  part  of  the  employer  in  whose 
service  the  injury  or  the  death  occurred."1 

There  may  doubtless  be  instances  where  a  lump  sum  payment  wholly  or 
partially  commuting  the  periodical  payment  would  be  advisable.  One  instance 
of  this  would  be  where  an  artificial  limb  or  other  device  was  required.  But  ex- 
perience seems  to  show  that  once  precedents  of  commutation  are  established  it  is 
difficult  to  control  their  extension,  and  while  there  should  prob/.b'y  be  provision 
for  commutation  at  the  discretion  of  the  administering  bjard,  such  a  provision 
should  be  surrounded  by  safeguards  adequate  to  prevent  its  abuse. 

As  to  the  basis  of  compensation  payment,  it  is  being  submitted  below,2  subject  to 
certain  considerations,  that  this  should  be  a  fixed  proportion  of  the  impahment  of 
earning  capacity  with  a  certain  fixed  maximum. 

Fifth:  The  relief  should  be  certain.  It  sliould  not  depend  upon  the  con- 
tinued solvency  of  the  employer  in  whose  service  the  injury  was  sustained. 

The  correctness  and  importance  of  this  principle  is  so  obvious  that  it  re- 
quires no  supporting  argument.  Its  absence  is  the  most  manifest  defect  of  an 
individual  liability  system.  The  Departmental  Committee  of  1901  frankly 
recognized  this  defect  of  the  English  Act,  and  forecast  the  trend  of  future  legisla- 
tion in  a  rather  remarkable  paragraph  quoted  elsewhere.3  As  stated  elsewhere,4 
insurance  under  an  individual  liability  system  fails  where  and  when  it  is  most 
needed.  In  the  case  of  the  small  employer,  where  the  danger  of  insolvency  is 
greatest,  insurance  is,  under  a  voluntary  system,  usually  omitted,  and  in  the  case 
of  the  larger  employer  it  fails  where  the  accident  is  of  a  magnitude  beyond  the  scope 
of  the  limited  liability  assumed  by  insurance  companies  at  normal  premium 
rates.5 

It  need  hardly  be  pointed  out  that  in  the  matter  of  solvency  a  collective 
system  offers  a  vast  superiority  over  an  individual  liability  system.  The  basic 
principle  of  insurance  is  the  spreading  of  loss  over  a  wide  area,  and  the  proposed 
system  would  act  automatically  as  an  insurance  system  under  which  each  emph  yer 
would  be  supported  by  the  whole  class  into  which  for  assessment  purposes  he  was 
placed.  The  only  danger  to  be  guarded  against  in  such  a  system  would  be  t'  at 
of  having  the  classes  too  small. 

The  highest  degree  of  solvency  is,  of  course,  attained  in  a  state  system  of 
insurance  backed  by  the  guarantee  of  the  state.  The  recent  criticisms  op  Dr. 
Friedensburg  upon  the  German  system  point  to  the  possibility  of  the  ultimate 
assumption  by  the  Government  of  full  control  of  and  responsibility  for  the  com- 
pensation now  administered  by  the  trade  associations  of  Germany.  The  present 
system  of  Germany  is  not  a  state  system.  The  state  merely  lends  its  compulsive 
power  for  purposes  of  organization.  Having  compelled  employers  to  organize,  the 
state  steps  aside,  leaving  the  management  of  the  funds  to  the  mutual  associations 

1  Rep.  Fed.  Com.  U.S.,  869,  and  see  further  discussion  of  subject,  p.  869  et  seq. 
-  See  post,  p.  85. 

3  See  post,  p.  96. 

4  See  post,  p.  91. 

5  See  post,  p.  105. 


70  CANADIAN  MANUFACTUEEES'  ASSOCIATION:  No.  65 


and  exercising  only  a  regulative  supervision.  The  size  of  the  mutual  associations., 
however,  affords  a  guarantee  of  solvency  sufficient  for  all  practical  purposes,  but 
as  Dr.  Friedensburg  suggests,  the  possibility  exists  that  a  period  of  industrial 
depression  might  render  the  trade  associations  incapable  of  fulfilling  their  obliga- 
tions. Against  such  a  contingency  the  Government  of  Germany  has  compelled 
the  setting  up  of  a  reserve,  which  has  now  reached  a  very  large  amount,  by  adding 
a  small  margin  to  the  yearly  insurance  rate. 

With  the  machinery  for  the  collection  of  insurance  premiums  in  the  hands  of 
the  state  there  is  not  the  same  necessity  for  the  setting  up  of  a  contingency  leservo, 
and  the  state  being  in  a  position  to  levy  the  necessary  funds,  need  have  no  com- 
punction in  assuming  a  responsibility  which  affords  the  strongest  possible  guar- 
antee to  the  workman. 

Eixth :  The  amount  of  compensation  should  he  definite  and  ascertainable 
hotii  to  the  workman  and  the  employer.  The  system  should  entirely  displace  the 
present  method  of  compensation  by  an  action  for  damages,  and  the  employer 
should  not  be  subjected  to  any  further  or  other  liability  except  in  caves  of  gross 
carelessness  or  intentional  wrong  on  the  part  of  the  employer. 

On  pure  economic  grounds  it  is  important  that  the  obligation  cast  upon 
employers  should  be  as  definitely  ascertained  as  possible.  If  the  burden  is  to  be 
transferred  to  the  consumer  it  must  be  more  closely  calculable  than  the  amount 
of  a  jury  verdict.  The  employer  should  be  in  a  position  to  place  in  his  estimates 
a  definite  amount  against  accident  compensation  without  being  subjected  to  tbe 
contingency  of  expensive  actions  at  law  in  addition. 

On  grounds  of  economy  also  and  for  the  protection  of  the  workman  himself 
it  is  important  that  the  glamour  of  a  common  law  verdict  with  its  speculative 
possibilities  should  be  removed.  So  long  as  there  is  left  open  to  the  workman 
the  opportunity  of  an  individual  right  of  action,  with  or  without  the  option  of  a 
subsequent  claim  upon  the  compensation  fund,  there  will  remain  the  possibility 
and  probability  that  the  workman,  under  the  advice  of  interested  persons,  will 
resort  to  this  speculative  remedy.1  "Compensatory  legislation  is  intended  to  exclude 
or  purposely  endeavors  to  discourage,  save  in  exceptional  cases,  the  use  of  pre-exist- 
ing remedies  at  law.  The  creation  of  a  single  liability  or  a  single  obligation  to 
contribute  to  a  compensation  fund,  is  the  purpose  and  evident  tendency  of  all 
foreign  legislation.  A  single  liability  is  essential  to  the  satisfactory  operation  of 
the  compensatory  principle  and  its  adoption  should  therefore  be  accompanied  by 
the  repeal,  as  far  as  possible,  of  all  other  remedies."2  This  accords  with  the 
opinion  of  the  writers  and  authorities  upon  the  subject.3 

It  is  very  important  also  in  a  system  of  compulsory  state  insurance  that  there 
should  not  be  left  outstanding  any  uncovered  liability.  Where  such  a  liability 
remains,  employers  will  naturally  have  recourse  to  insurance  to  protect  them- 
selves and  the  very  condition  of  things  which  the  state  insurance  system  is  intended 
to  prevent  is  again  called  forth.  From  the  standpoint  of  the  employer  the 
advantage  of  a  compensation  system  such  as  that  proposed  would  be  largely  lost 
if  the  older  legal  remedies  were  still  left  available  to  the  workman.     It  may  be 

*■  

'Rep.  Conf.  Com.,  214;   Rep.  Mich.  Com.,  33. 

'S.  &  E.,  264. 

JRep.  Conf.  Com.,  227;  see  also  S.  &  E.,  79;  Rep.  Fed.  Com.  U.S.,  16. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  71 

that  the  other  remedies  would  be  rarely  resorted  to,  and  this  is  sometimes  used  as 
an  argument  against  their  abolition.  But  so  long  as  the  possibility  of  an  action 
at  law  remains  so  long  will  the  workmen  be  tempted  to  resort  to  it  and  so  long  will 
the  employer  be  subject  to  an  insecurity  against  which  he  will  find  it  necessary 
to  insure  himself  and  will  be  solicited  to  do  so  by  insurance  companies.  Such  a 
system  would  not  be  satisfactory  to  the  employers  of  the  province. 

A  difficult  situation  appears  to  have  arisen  in  the  State  of  Ohio  by  reason  of 
the  provision  of  the  Act  of  that  State  which  gives  to  the  employee  the  option,  in 
eases  where  the  injury  was  due  to  the  wilful  act  of  the  employer  or  his  officers  or 
agents,  or  their  failure  to  comply  with  any  statute  or  municipal  regulation  or  the 
orders  of  government  or  municipal  officers,  either  to  apply  for  compensation  to  the 
Insurance  Boad  or  to  bring  an  action  at  law.  Representatives  of  liability  insur- 
ance companies  are  urging,  and  with  reason,  that  under  the  state  insurance 
system  a  very  substantial  portion  of  the  risk  is  left  uncovered  while  under  the 
policies  of  the  private  companies  this  risk  is  assumed.  The  result  has  been  a 
general  indisposition  on  the  part  of  employers  to  enter  the  state  scheme,  to  the 
prejudice  of  the  state  system  in  competing  with  private  companies. 

In  the  State  of  Washington  there  was,  it  appears,  at  first  some  hesitation  on  the 
part  of  employers  as  to  dropping  all  liability  insurance,  but  it  was  largely  due  to 
the  doubt  as  to  the  constitutionality  of  the  Act,  and  has  now  almost  entirely 
disappeared. 

There  would,  of  course,  be  no  objection  to  strict  penalties  upon  the  careless 
employer,  but  these  should  not  be  in  the  form  of  an  action  against  the  employer 
by,  and  for  the  benefit  of,  the  workman.  The  regulations  of  the  Board  or  of  the 
voluntary  associations  would  doubtless  provide  penalties  for  negligence  on  the  part 
of  the  employer  for  breaches  of  statutory  enactments  or  disobedience  to  duly 
authorized  inspectors.  Provision  might  also  be  made  for  proceedings  by  the 
Board  against  an  individual  employer  in  the  case  of  an  injury  due  to  the  wilful 
act  of  the  employer.  But  such  proceedings  should  not  accrue  to  the  benefit  of  the 
individual  workman  and  any  amount  recovered  should  go  into  the  general  fund. 
On  the  whole  it  is  submitted  that  very  little  improvement  can  be  made  upon  the 
provision  of  the  Washington  Act  dealing  with  this  feature.1 

Seventh  :  The  funds  for  relief  should  be  provided  by  joint  contributiofis  from 
employers,  workmen,  and  the  Province.  Employers  and  workmen  should  pay  in 
such  proportions  as  represent  the  number  of  accidents  occurring  by  reason  of  the 
hazard  of  the  industry  and  the  fault  of  the  employer  on  the  one  hand  and  the  fault 
of  the  workman  on  the  other.  The  province  should  contribute  an  amount  repre- 
senting approximately  the  cost  of  administration. 

The  only  phase  of  the  subject  of  workmen's  compensation  upon  which  any 
considerable  difference  of  opinion  exists  is  that  of  contribution  by  the  workman  to 
the  cost  of  the  insurance.2  So  long  as  compensation  was  a  matter  of  recovery  of 
damages  for  fault,  direct  or  indirect,  on  the  part  of  the  employer,  there  was  no 
logical  reason  for  contribution,  but  the  modern  systems  of  compensation  in  which 
all  cases  are  covered  practically  regardless  of  fault  raise  the  question  whether  the 
workman  should  not  contribute  out  of  his  wages  a  proportion  of  the  insurance 
premium  representing  the  proportion  of  accidents  due  to  the  fault  of  the  work- 
man. 


1  Section  9. 

2  See  Rep.  Ohio  Com.,  316. 


72  CANADIAN  MANUFACTUBEBS'  ASSOCIATION:  No.  65 

h— 

The  difference  of  opinion  amongst  expert  authorities  ma}-  be  attiibuted  very 
largely  to  the  strenuous  opposition  of  the  rank  and  file  of  the  labor  interests  to  any 
deduction  of  wages.1  Some  of  the  writers  and  authorities  upon  the  subject  have 
been  or  are  official  representatives  of  labor  organizations,  and  are  naturally  in- 
fluenced by  the  general  attitude  of  these  bodies.  Other  investigators  who  are  not 
directly  subject  to  this  influence  are  nevertheless  actuated  by  a  spirit  of  compromise 
to  the  hostility  of  labor  organizations  and  by  the  notion  that  any  economic  in- 
justice will  find  its  adjustment  in  the  amount  of  wages.  As  the  question  of  con- 
tribution is  the  only  feature  of  the  subject  upon  which  the  interests  of  employers 
and  workmen  seriously  diverge,  it  is  only  natural  that  this  spirit  of  compromise 
lias  found  expression  in  some  of  the  established  systems.  But  notwithstanding  the 
disposition  of  workmen  to  avoid  the  burden,  the  principle  of  joint  contribution  has 
been  recognized  and  embodied  in  a  majority  of  the  systems2  and  workingmen 
themselves  are  becoming  gradually  educated  to  a  broader  view  of  the  whole  subject. 

The  attitude  of  trades  unions  upon  the  question  of  contribution  is  commented 
upon  by  Professor  Henderson  in  the  following  passage:  "  Obligatory  workingmsn's 
insurance  has  been  in  the  past  in  this  country  connected  with  attempts  to  compel 
the  workman  to  pay  an  excessive  share  of  the  premiums,  to  break  the  power  of  the 
union  and  alienate  its  members,  and  to  retain  the  equitable  share  of  the  funds  to 
which  the  men  have  contributed  if  they  leave  the  service  or  are  discharged.  In 
conventions  the  propositions  for  collective  insurance  have  been  championed  by  the 
socialist  faction  and  have  gone  down  in  the  defeat  of  this  party.  Insurance  in  the 
European  sense  has  never  yet  been  offered  to  our  workmen  in  any  state.3-  When  it 
is  shown  that  obligatory  insurance  does  not  mean  absolute  control  of  employers, 
but  union  of  effort  in  which  both  sides  are  fairly  represented  in  local  management; 
that  the  interest  in  collective  bargaining  remains  untouched ;  that  voluntary 
organizations  are  recognized  and  made  secure  by  suitable  state  supervision  and 
control  and  that  taxpayers,  so  far  from  being  asked  to  increase  burdens,  will  be 
substantially  relieved  from  many  charity  demands,  it  seems  likely  that  indifference 
and  antagonism  will  change  to  approval.  Mr.  John  Mitchell  has  expressed  a 
favorable  opinion  which  already  has  won  the  attention  and  approval  of  many 
trade-unionists/'4 

The  point  of  view  upon  this  phase  of  workmen's  compensation  varies  with  the 
basic  conception  of  the  whole  subject.  "Great  Britain  clinging  to  the  spirit  of 
the  poor  laws,  exacts  no  contribution  from  the  beneficiaries  of  her  old-age  pensions 
and    compensation    laws.     On    the    continent,    however,    workmen    contribute    to 

social  insurance  generally  and  in  some  cases  to  accident  compensation 

Insisting  that  differentiation  from  poor  relief  must  be  conspicuous  in  fact  if 
social  insurance  is  not  to  encourage  pauperism,  we  make  no  difficulty  about  its 
accuracy  in  point  of  law  and  shall,  therefore,  assume  that  compensation  acts  are 


1  But  see  Rep.  Mich.  Com.,  134,  141. 

2  The  contributory  principle  is  recognized  in  the  following  European  countries: 

Norway 4  weeks  waiting  period. 

Sweden 60  days  waiting  period. 

Denmark 13  weeks  waiting  period. 

Holland 13  weeks  waiting  period. 

Germany 13  weeks  waiting  period. 

Austria 4  weeks  waiting  period  and  10%  of  premiums 

Switzerland 25%  of  premiums  . 

8  This  is  of  course  not  true  since  the  Acts  of  Washington,  Ohio  and  Massachusetts. 
4  Henderson,   Industrial  Insurance,  2d  edition,  61. 


1912  WORKMEN'S  COMPENSATION  COMMISSI  OX.  73 

not  to  be  classed  with  pauper  legislation.'"1  In  other  words :  "  The  British  legis- 
lature intervenes  to  relieve  dependency;  the  German  to  confer  a  right  to  assistance 
in  return  tor  contribution.'"2 

As  a  matter  of  fact,  indeed,  the  original  intention  in  introducing  the  English 
Act  was  that  workmen  should  contribute  to  the  compensation  for  injuries  by  them- 
selves bearing  the  burden  for  the  first  three  weeks.  Mr.  Joseph  Chamberlain  stated 
in  introducing  the  Act  of  1897,  that  the  only  ground  which  justified  the  proposal 
of  the  Government  to  make  provision  for  work  injuries  was  the  fact  that  there 
were  a  large  number  of  injuries  that  might  be  presumed  to  incapacitate  the  work- 
men more  than  three  weeks  and  said:  "If  it  could  be  presumed  that  all  work- 
injuries  would  last  three  weeks  or  less,  I  can  see  no  reason  for  the  interference  of 
the  Government  because  those  are  injuries  for  which  the  workman  might  be 
expected  to  provide  against  himself/'3 

The  German  system  has  steadily  adhered  to  the  principle  of  a  long  "  waiting 
period,"  thirteen  weeks.  In  other  systems  the  workman  pays  directly  a  portion 
of  the  insurance  premium  by  way  of  deduction  from  his  wages,  and  the  latest  and 
one  of  the  most  thoroughly  considered  acts  of  the  United  States,  namely,  that  of 
Ohio,  recognizes  the  contributory  principles  by  authorizing  the  employer  to  deduct 
10  per  cent,  of  the  insurance  premium  from  the  wages  of  the  workman. 

While  the  general  tendency  is  for  workmen  to  oppose  and  employers  to  favour 
contribution  from  the  workman,  this  is  not  uniformly  the  ease.  In  Germany 
where  the  relations  arising  out  of  the  workman's  contribution  are  best  understood 
the  tendency  is  to  some  extent  in  the  other  direction.  During  the  last  session  of  the 
Reichstag  an  amendment  proposed  by  employers  and  bitterly  opposed  by  workmen 
was  passed  increasing  the  contributions  of  employers  to  the  sickness  fund  from  one 
third  to  one-half.4  The  motive  of  the  workmen  in  opposing  the  change  was  to 
maintain  their  representation  on  the  management  of  the  association.  There  is 
therefore,  this  further  consideration  in  connection  with  the  question  of  contribu- 
tion that  the  extent  to  which  workmen  participate  in  the  administration  of  the 
system  will  naturally  depend  upon  whether,  and  to  what  extent,  workmen  contribute 
to  the  insurance  fund. 

Leaders  of  labour  organizations  are  in  fact  quite  free  to  admit  that  their  chief 
objection  to  contribution  is  based  not  upon  principle  but  upon  the  unwillingness 
of  the  workman  to  pay  for  insurance ;  and  that  education  is  likely  to  make  a  great 
difference  in  this  attitude.  It  is  believed  that  the  workmen  of  Canada  and  par- 
ticularly of  the  Province  of  Ontario  will  be  quicker  than  the  workmen  of  most 
other  countries  to  appreciate  the  immense  benefits  of  the  proposed  scheme  and  to 
take  their  proper  part  in  its  maintenance. 

Apart  from  experience  and  logic,  however,  it  should  be  borne  in  mind  that 
the  great  mass  of  employers  in  the  Province  regard  it  as  of  paramount  importance 
that  workmen  should  contribute  to  the  accident  insurance  funds.  A  system 
throwing  the  burden  entirely  upon  employers  would  be  received  with  hostile  feel- 
ings which  would  very  naturally  affect  the  administration  of  the  Act.  It  will 
undoubtedly  make  a  great  difference  throughout  the  Province  in  the  enforcement 
of  the  Act  and  in  the  establishment  and  development  of  the  proposed  voluntary 
associations  for  accident  prevention,  if  the  Act,  instead  of  bein?  looker!  upon  as 
an  imposition,  can  lie  launched  with  the  favour  and  even  enthusiasm  of  employers. 

1  Rripf  of  Carman  F.  Randolph,  Rep.  Fed.  Com.  U.S.,  1428. 
2S.  &  E.,  10. 

3  See  Rep.  Fed.  Con.  U.S  .  1092;    S.  &  E.,  10. 

4  See  Rep.  Conf.  Com.,  165. 


74  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

t — — . 

The  principal  reason  for  covering  all  accidents,  regardless  of  questions  of 
fault,  is  that  the  expense  of  determination  of  these  questions  in  specific  cases  is 
eliminated.  But  to  throw  the  entire  cost  of  insurance  upon  the  employer  not  only 
shocks  the  sense  of  justice  but  places  the  workman  in  a  humiliating  position.  It  is 
no  doubt  true  that  on  its  economic  side  any  money  contribution  on  the  part  of  the 
workman  could  be  worked  out  as  a  matter  of  adjustment  of  wages.  It  may  be 
observed  by  the  way,  that  this  is  true  in  a  sense  converse  to  that  in  the  argument 
against  contribution,  for  if  the  workman's  contribution  were  inequitably  large 
it  would  result  in  an  increase  of  wages.  There  is,  however,  a  point  at  which  the 
self  respect  of  the  workman  becomes  involved.  Even  the  most  advanced  form  of 
socialism  would  not  seek  to  free  the  workman  from  all  sense  of  responsibility  for 
his  own  actions,  or  to  throw  upon  the  employer  or  the  community  at  large  the 
responsibility  of  making  provision  for  his  every  want.  So  long  as  it  is  recognized 
that  there  are  certain  things  which  the  workman  is  expected  to  provide  for  himself 
out  of  his  wages,  there  must  be  a  point  at  which  the  obligations  of  the  employer 
end.  This  principle  is  so  elementary  that  its  mere  statement  almost  calls  for 
apology;  yet  this  very  principle  would  be  violated  by  throwing  on  employers  the 
burden  of  compensating  workmen  for  injuries  due  to  their  own  fault.  So  long  as  any 
injuries  are  due  in  whole  or  in  part  to  the  fault  of  the  workman  elementary  prin- 
ciples of  justice  demand  that  he  should  bear  a  share  of  the  pecuniary  responsibility. 

If  the  pecuniary  consideration  were  the  only  one  it  might  be  partially 
counterbalanced  by  the  inconvenience  of  collecting  the  workman's  portion  and  the 
irritation  attendant  thereupon.  But  there  are  other  and  weightier  reasons  for  a 
recognition  of  the  principle  of  contribution.  It  will  not  be  seriously  disputed 
that  the  highest  degree  of  co-operative  effort  on  the  part  of  the  workman  to  the  end 
of  preventing  accidents  cannot  be  secured  without  throwing  upon  him  some  direct 
pecuniary  responsibility.1  If  there  should  be  irritation  attendant  upon  the  practice 
of  deducting  from  wages  a  portion  of  the  insurance  premium,  or  if  there  should  be 
dissatisfaction  with  the  "  waiting  period,"  these  will  serve  to  keep  before  the  mind 
of  workmen  not  only  individually  but  through  their  organizations  to  a  degree  not 
otherwise  possible,  the  interest  of  the  workman  in  systematic  and  scientific  methods 
of  accident  prevention ;  and  collective  effort  on  the  part  of  workmen  is  in  fact  as 
necessary  as  collective  effort  on  the  part  of  employers  in  order  to  attain  a  full 
measure  of  success  in  prevention  of  accidents.2 

If  there  were  not  to  be  some  form  of  contribution  from  workmen  it  would 
be  necessary,  upon  principles  of  elementary  justice,  to  withhold  compensation  in 
cases  where  the  injury  was  due  to  the  fault  of  the  workman.  The  proposition 
to  compensate  in  all  cases  regardless  of  fault  is  logically  contingent  upon  the 
workman  paying  his  share.  The  employer's  share  represents  those  injuries  which 
are  the  result  of  the  fault  of  the  employer  or  his  agents  or  of  the  inherent  hazard 
of  the  occupation.  The  workman's  share  represents  those  injuries  which  are 
due  to  the  fault  of  the  workman. 

There  is  of  course  no  question  that  a  very  large  number  of  accidents  are 
attributable  to  neither  the  fault  of  the  employer  nor  the  intrinsic  hazard  of  the 
industry.  The  only  question  that  can  arise  is  as  to  the  relative  proportions. 
The  following  figures  arc  given  from  the  statistics  of  Germany:8 

Employers'    fault    17%  per  cent. 

Workers'    fault 29^  per  cent. 

Employers'  and  Workers'  fault   10       per  cent. 

Hazard   of   industry    43      per  cent. 

'Rep.  Ohio  Com.,  Part  II,  13;   Interim  Rep.  Ont.  Com.,  440. 

2  For  further  argument,  see  Rep.  Ohio  Com.,  Pt.  II,  319;    S.  &  E.,  55. 

•S.  &  E.,  55. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  75 

Accident  statistics  of  industries  for  the  three  years,  1887,  1897,  and  1907  under 
German  law1  give  the  following  figures : 


1887. 
% 

By  fault  of  employer   20.47 

By  fault  of  employee   26.56 

By  fault  of  both  parties    8.01 


Due  to  negligence  of  the  parties 55.04 

Due  to   inevitable   risks   of  the   industries 

and  other  causes   44.96 


1907. 

(46,000 

1897. 

Accidents) - 

% 

% 

17.30 

16.81 

29.74 

28.89 

10.14 

9.94 

57.18 

55.64 

42.82 

44.36 

100.0ft  100.00  10(1.00 

"An  investigation  by  Crystal  Eastman,  a  trained  student  of  this  problem, 
of  377  fatal  accidents  in  the  Pittsburg,  Pennsylvania  district,  classified  the  respon- 
sibility as  follows :  Causes  attributable  solely  to  employers  or  those  who  represented 
them,  29.97  per  cent.;  causes  attributed  solely  to  those  killed,  or  their  fellow 
workmen,  27.85  per  cent.;  causes  attributed  to  both  the  above  classe-s  16.91  per 
cent.,  causes  attributed  to  neither  of  the  above  classes  26.27  per  cent.2 

The  principle  of  contribution  may  as  above  indicated  be  embodied  in  a  number 
of  ways.  The  most  direct  method  is  that  of  collecting  from  the  workman  a 
proportion  of  the  insurance  premium.  This  is  practicable  only  by  having  the 
employer  pay  the  whole  premium  and  deduct  the  proper  amount  from  the  wages 
of  the  workman.  Another  method  is  to  interpose  a  considerable  "waiting  period" 
between  the  occurence  of  the  injury  and  the  beginning  of  compensation  payments, 
thus  leaving  workmen  to  bear  minor  injuries  either  individually  or  through  col- 
lective first  aid  or  sickness  funds.  A  third  method  is  by  reduction  of  the  scale 
of  compensation,  leaving  workmen  to  bear  individually  a  greater  portion  of  the 
burden  of  all  injuries. 

It  is  submitted  that  the  last  of  these  three  methods  is  the  least  satisfactory.' 
It  has  been  urged  that  so  long  as  the  workman  is  not  compensated  up  to  the  full 
amount  of  the  loss  of  earning  capacity  he  does  in  fact  contribute  to  the  extent 
of  the  difference  between  the  full  earning  capacity  and  the  basis  of  compensation. 
But  the  reasons  for  fixing  the  basis  of  compensation  at  one-half  and  two-thirds 
the  lost  earning  power  are  not  connected  with  the  question  of  contribution.  For 
obvious  reasons  it  would  not  be  expedient  to  hold  out  to  a  workman  an  undiminished 
income  as  the  result  of  disablement.  If  contribution  were  the  only  consideration  it 
is  submitted  that  it  would  be  better  to  pay  full  compensation  with  contribution 
than  partial  compensation  without  contribution. 

There  are  three  answers  to  the  argument  that  the  difference  between  the 
basis  of  compensation  and  full  earnings  constitutes  a  sufficient  contribution  from  the 
workman.  In  the  first  place  the  100  per  cent,  "earning  capacity"  of  the  work- 
man is  usually  based  arbitrarily  upon  the  wages  which  the  workman  was  receiving 
at  the  time  of  the  injury.  But  if  the  workman  had  not  been  injured  there  is 
no  human  probability  that  he  would  have  earned  full  wages  to  the  time  of  his 

JRep.  Fed.  Com.  U.S.,  732.  See  also  Rep.  Ohio  State  Bar.  Ass'n.  Vol.  XXXII. ,  p.  100; 
Rep.  Ohio  Com.,  Pt.  I.,  p.  xxix. 

2  For  further  reference  to  questions  of  fault,  see  Interim  Rep.  Ont.  Com.,  314  et  seq., 
353,  et  seq.;  Rep.  111.  Com.,  36,  79;  Bulletin  74  U.S.  Bur.  Lab.,  120;  Bulletin  U.S. 
Bur.  Lab.,  No.  92,  pp.  2,  3,  60,  65. 

"See  S.  &  E.,  56. 


76  CANADIAN  MANUFACTUEEES'  ASSOCIATION:  No.  65 

death,  so  that  the  workman's  actual  loss  cannot  be  leckoned  upon  a  100  per  cent, 
basis.  In  the  second  place  the  compensation  would  place  the  workman  beyond 
further  contingency  of  loss  of  earning  capacity  by  reason  of  injury  from  other 
causes  or  of  sickness.  The  compensation  would  constitute  an  assured  income  not 
subject  to  contingencies  of  sickness,  old  age,  or  unemployment  and  would  render 
insurance  against  these  unnecessary.1  In  the  third  place  the  workman  is  being 
paid  while  not  producing.  Compensation  cannot  be  put  on  the  same  basis  as 
wages.  Wages  are  the  price  paid  for  service  actually  rendered.  A  system  which 
would  place  the  non-productive  individual  by  the  accident  of  incapacity  on  the 
same  plane  as  the  productive  workman  would  be  an  economic  anomaly.  As  to 
this  phase  of  the  subject  Dr.  Zacher  has  said:  ''The  limitations  of  the  pension 
for  complete  industrial  incapacity  to  two-thirds  of  the  annual  earnings,  as  in 
the  case  of  most  government  pensions,  is  justified  by  the  fact  that  the  time  which 
every  workman  unavoidably  loses  through  unemployment  and  the  cost  of  working 
clothes,  tools,  etc.,  must  be  deducted  and  that  injuries  caused  by  the  workman's 
own  fault  are  compensated  with  the  rest."2 

A  much  more  equitable  and  at  the  same  time  more  salutary  method  of  con- 
tribution is  through  a  "waiting  period"  immediately  following  the  occurrence  of  the 
injury,  during  which  period  no  compensation  is  paid.  One  purpose  of  a  waiting 
period  is  the  prevention  of  simulation  and  malingering.  These  evils  doubtless 
exist  in  every  system  of  workmen's  compensation,3  and  one  of  the  great  problems 
is  to  reduce  them  to  a  minimum.  The  elimination  of  simulation  is  important,  not 
only  in  the  interest  of  economy  but  because  of  the  demoralizing  effect  produced 
upon  the  working  class  and  the  stigma  thrown  upon  the  whole  system  by  successful 
imposition.  Accordingly  every  system  of  workmen's  compensation  withholds  com- 
pensation for  trifling  injuries  whose  effects  do  not  last  beyond  a  week  or  two.  By 
this  means  a  considerable  saving  of  administrative  work  is  effected  and  simulation 
prevented  in  the  form  most  readily  practicable.4 

The  danger  in  fixing  a  waiting  period  as  a  form  of  contribution  is  that  its 
function  as  such  is  liable  to  be  disregarded  or  forgotten  in  favor  of  its  function 
as  a  preventive  of  simulation.  And  arguments  are  very  likely  to  be  advanced  against 
the  "injustice"  of  withholding  compensation  from  workmen  for  so  long  a  period. 
So  in  England,  even  before  Mr.  Chamberlain's  Bill  passed  the  House  the  period 
of  three  weeks  was  reduced  to  two  weeks.  In  1906,  in  spite  of  the  recommendations 
of  the  Special  Parliamentary  Committee  against  it,  the  period  was  further  reduced 
to  one  week  with  provision  that  where  the  injury  incapacitated  the  workman  for 
more  than  two  weeks,  compensation  should  commence  from  the  beginning.  In 
the  discussion  of  the  amendments  the  propriety  of  the  workman's  bearing  some 
share  of  the  accidents  was  apparently  entirely  lost  sight  of  and  the  only  considera- 
tion was  the  influence  of  the  provision  upon  malingering  and  simulation. 

A  very  satisfactory  solution  of  the  problem  of  a  waiting  period  which  would 
3upply  at  the  same  time  an  avenue  of  contribution,  a  check  upon  simulation,  prompt 
and    adequate   surgical   and    medical     aid    and     an     inducement   to   co-operation 
between  employer  and  workman  was  suggested  in  the  draft  Act  submitted  by  the 
investigating  commission  of  the  State  of  Washington.     This  was  a  first  aid  fund 

1  Interim  Rep.  Out.  Com.,  327. 

2  Handworterbuch  der  Staatswissenschaften,  Vol.  VIII.,  p.  65,  Jena,  1911. 

a  Bulletin  des  Assurances  Sociales,  1908,  No.  5,  201;  Rep.  Fed.  Com.  U.S.,  1432;  La 
France  Judiciare,  Mar.  12,  p.  35;   VIII,  Congress  des  Assurances  Sociales,  138,  790. 

*  S.  &  E.,  290;  Rep.  Fed.  Com.  U.S.,  84;  Journal  of  Insurance,  Institute  of  London, 
1909-10,  p.  59;   F.  &  D.,  143,  Cd.  2208,  p.  75. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  7? 

which  would  fill  up  the  gap  left  by  the  waiting  period  and  provide  a  "buffer'' 
fund  out  of  which  hospital  and  surgicail  expenses  would  be  paid  where  necessary, 
as  well  as  compensation.  The  principle  of  this  fund  was  in  a  measure  that  of 
the  German  sickness  fund,  but  instead  of  thirteen  it  was  to  cover  only  three 
weeks.  The  fund  was  to  have  been  raised  by  equal  contributions  from  employers 
and  employees,  the  employees'  portion  to  be  deducted  from  wages.  The  scheme 
was  supported  by  the  labour  interests  but  some  opposition  was  encountered  from 
employers  in  less  hazardous  occupations  who  objected  to  paying  at  the  same  rate 
as  that  of  the  more  hazardous  industries.  In  the  haste  of  the  legislative  session 
it  was  found  impossible  to  reform  the  scheme  and  it  was  dropped  from  the  Act 
with  a  view  to  its  later  incorporation  by  way  of  amendment.  In  a  report  issued 
by  the  Industrial  Insurance  Commission  which  is  in  charge  of  the  administration 
of  the  Act,  covering  the  first  few  months  of  operation,  the  immediate  creation  of 
such  a  fund  is  strongly  urged  upon  the  legislature.1 

The  equitable  proportion  of  the  cost  of  insurance  to  be  borne  by  workmen 
would,  according  to  the  statistics  above  shown,  be  from  25  to  30  per  cent.  If  it 
is  decided  that  the  contribution  shall  be  direct  it  is  submitted  that  the  Act  should 
name  a  definite  proportion  with  a  direction  to  the  employer  to  deduct  the  proper 
amount  at  stated  periods  from  the  wages  of  the  workman.  If  the  first  aid 
fund  plan  is  adopted  the  contributions  should  be  so  arranged  that  the  workman 
would  bear  his  proper  share  of  the  total  cost  both  of  first-aid  and  compensation 
proper.  If  sickness  insurance  or  other  benefits  were  to  be  included  in  the  scope  of 
the  society,  the  proportion  of  contributions  could  be  fixed  accordingly. 

With  reference  to  the  portion  to  be  borne  by  the  State  it  is  submitted  that 
this  should  cover  the  cost  of  administering  the  system  so  that  practically  the 
whole  of  the  contributions  to  the  fund  should  go  to  the  relief  of  the  injured  work- 
men and  their  dependents.2  The  withdrawal  from  the  courts  of  the  work  of 
adjudication  will  mean^  a  considerable  saving  in  the  expense  of  administration  of 
justice  already  borne  by  the  province.  The  provision  for  the  needs  of  injured  work- 
men and  their  dependents  will  also  relieve  to  a  very  large  extent  the  burden  now 
borne  by  the  general  public  by  way  of  poor  relief  and  charity.3  In  most  modern 
compensation  systems  these  features  of  workmen's  compensation  are  recognized 
and  the  state  itself  bears  a  portion  of  the  expense  of  the  system.  In  some  systems, 
as  for  instance,  that  of  Switzerland,  the  state  in  fact  contributes  a  definite  pro- 
portion of  the  insurance  premiums. 

Eighth  :  The  system  of  relief  should  he  such  as  to  secure  in  its  administration 
a  maximum  of  efficiency  and  economy,  and  as  large  a  proportion  as  possible  of 
the  money  contributed  should  be  actually  paid  out  in  compensation. 

This  principle  which  is  of  the  most  obvious  importance  is  in  many  juris- 
dictions the  most  consistently  ignored.  There  are  now  available  abundant  statistics 
to  demonstrate  the  relative  efficiency  of  the  different  systems  of  compensation  in 
performing  their  intended  functions.  The  German  collective  system  represents  an 
efficiency  of  87.2  per  cent.,  only  12.08  per  cent,  being  taken  up  in  expenses  of 
administration.4     Other  European  systems  range  from  80  to  90  per  cent.     In  the 

1  See  post,  p.  81. 

2  Rep.  Mich.  Com.,  134;   Rep.  Ohio  Com.,  Pt.  II.,  p.  316. 

3  Rep.  Ohio  State  Bar.  Ass'n.  XXXII.,  p.  123;   Rep.  N.Y.  Com.,  31;   Rep.  Ohio  Com., 
Pt.  II.,  p.  208. 

4  S.  &  E.,  47. 


78  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

■  — ■ ■ 

State  of  Washington  the  cost  of  administration  for  the  first  six  months,  which 
is  naturally  heavier  than  it  will  be  for  the  future,  has  been  well  within  15  peT 
cent,  of  the  compensation  payments. 

The  individual  liability  systems  on  the  other  hand  show  a  very  large  proportion 
of  waste  in  conveying  the  money  contributed  by  the  employer  to  injured  workmen 
and  their  dependents.1  Recent  statistics  of  the  Board  of  Trade  in  England  giving 
figures  of  the  business  of  liability  insurance  companies  indicate  the  administrative 
waste  of  the  English  system  and  show  that  while  these  companies  have  been 
operating  at  a  net  loss,  a  very  large  proportion  of  the  money  paid  in  by  the  liability 
insurance  premiums  has  been  consumed  in  expenses  of  litigation  and  commissions 
on  business.2  Because  of  circuity  of  liability  under  the  English  systems  and  the 
method  of  adjustment  of  claims,  there  is  a  further  waste  which,  it  is  calculated, 
brings  the  efficiency  of  the  English  Act  down  to  the  neighborhood  of  50  per  cent. 

Statistics  gathered  by  various  commissions  in  the  United  States  show  that  in 
that  country  less  than  twenty- five  per  cent,  of  the  money  paid  in  'liability  insurance 
premiums  actually  reaches  the  injured  workman  or  his  dependents,  the  rest  being 
consumed  in  expenses  of  litigation,  soliciting  business,  profits  and  expenses  of 
administration.'  It  is  fair  to  assume  that  liability  insurance  in  this  province  would 
show  much  the  same  percentage  of  waste  as  in  the  United  States,  and  no 
system  of  individual  liability  could  probably  be  expected  to  produce  much  better 
results  than  those  shown  under  the  English  Act." 

The  aggregate  pay-roll  represented  by  the  Canadian  Manufacturers'  Associa- 
tion in  Ontario  is  about  $150,000,000.  On  the  basis  of  two  per  cent,  the  insurance 
premiums  of  the  members  of  the  Association  would  amount  to  $3,000,000.  There 
is  every  reason  to  believe  that  under  an  individual  liability  system  one-half  of  this 
amount  or  $1,500,000  would  be  wasted  for  members  of  the  Association  alone, 
without  accounting  for  manufacturers  who  are  not  members  of  the  Association 
or  for  employers  in  other  occupations.  The  greater  part  of  this  money  can 
be  saved  either  for  employers  or  for  workmen  by  the  elimination  of  the  circuitous 
liability  involved  in  the  individual  liability  system. 

Ninth :  The  procedure  for  the  adjustment  of  claims  should  be  as  far  as 
possible  dissociated  from  the  regular  courts  of  law.  It  should  be  simple,  and 
calculated  to  involve  in  its  operation  a  minimum  of  friction  between  employer 
and  employee. 

The  largest  item  in  the  expense  of  the  present  system,  and  a  very  consider- 
able item  in  all  individual  liability  systems,  is  the  expense  connected  with  the 
adjustment  of  claims.  The  larger  portion  of  this  expense  consists  of  course  of 
legal  fees.  In  a  system  where  compensation  depends  upon  the  determination  of 
private  rights  as  between  employer  and  employee, — and  +his  is  indispensible  where 
the  right  of  the  employee  depends  upon  proof  of  fault — a  resort  to  the  courts,  if 
not  inevitable,  is  avoidable  only  with  great  difficulty.     But  in  a  system  where  the 

1  See  post,  p.  106. 

2  See  P.  &  D.,  46;  "Up  to  the  present  time  expenses  of  management,  including  litiga- 
tion and  adjustment,  have  absorbed  one-half  the  premiums.  The  industries  of  Great 
Britain  are  thus  paying  in  premiums,  if  adjustments  are  fair,  about  twice  the  net  cost, 
and,  if  not  fair,  they  are  paying  in  expenses — which,  under  the  German  system,  have 
been  made  unnecessary — many  times  what  would  enable  all  adjustments  to  be  fair,  and 
even  liberal." 

3  Rep.  111.  Com.,  37;   Rep.  Fed.  Com.  U.S.,  43;   See  post,  p.  105. 

4  See  post,  p.  106. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  79 

right  to  recover  depends  largely  or  entirely  upon  the  establishment  of  a  claim 
to  a  fund  there  is  no  necessity  for  the  formalities,  and  no  excuse  for  the  expense, 
of  an  ordinary  legal  action. 

In  some  jurisdictions  the  method  of  arbitration  has  been  resorted  to.  This 
method,  however,  maintains  the  notion  of  a  contest  between  the  employer  and 
the  employee  with  all  the  disadvantages  attendant  upon  such  a  notion.  In  addi- 
tion to  this,  the  court,  being  an  amateur  one,  has  not  the  experience  or  facilities 
which  a  regular  body  would  have  of  dealing  with  the  various  phases  that  arise.1 

Another  important  consideration  in  determining  the  method  of  adjustment  is 
the  desirability  of  uniformity.  Under  a  method  of  arbitration,  and  even  under  a 
system  of  judges  or  other  legal  tribunals,  there  is  certain  to  be  a  great  diversity 
of  treatment,  even  though  an  effort  be  made  to  adhere  to  lines  of  precedent.  In 
the  'light  of  the  criticisms  of  Dr.  Friedensburg2  it  is  apparent  also  that  a  syst  m 
of  local  judges  governed  by  precedent  may  give  rise  to  very  grave  abuses. 

The  method  pointed  to  by  all  careful  observers  and  adopted  by  many  juris- 
dictions is  that  of  a  special  board  or  tribunal.  Such  a  board  should  of  course  be 
vested  with  full  jurisdiction  over  questions  of  fact,  and  the  procedure  should  be 
rendered  as  simple  and  direct  as  possible.  It  is  submitted  that  in  the  large 
majority  of  cases  a  full  and  satisfactory  adjustment  could  be  made  upon  written 
reports  supported  by  affidavit.  A  competent  board  of  officials  could,  upon  reports 
of  the  physicians  in  charge,  the  employer  and  the  injured  person,  adjust  most  cases 
in  a  manner  vastly  more  satisfactory  than  would  be  possible  through  the  ordinary 
machinery  of  the  courts.  This  is  the  method  adopted  by  the  Washington  Board 
and  it  is  said  to  work  very  satisfactorily.  It  may  be  added  that  a  wrong  decision 
would,  under  such  a  system  as  that  proposed,  not  be  a  very  serious  matter  as  it 
could  be  reviewed  at  any  time  and  set  right.  It  would  not  be  a  matter  of  settling 
once  and  for  all  a  contest  over  legal  rights  as  between  two  parties. 

Tenth:  The  system  of  compensation  should  he  directly  associated  ivith  a 
system  of  inspection  with  a  view  to  the  prevention  of  accidents  and  a  system  of 
prompt  and  expert  medical  attendance  to  mitigate  the  effect  of  the  injuries. 

This  principle  is  really  a  corollary  of  the  first  principle,  which  embodies  the 
conservation  phase  of  the  subject  of  workmen's  compensation.  The  colle  tive 
insurance  systems  tend  almost  automatically  to  produce  a  system  of  expert  inspec- 
tion. This  is  of  course  the  principal  reason  for  the  advanced  position  of  Ger- 
many in  the  matter  of  accident  prevention.3  Each  insurance  association  being 
confined  to  some  particular  line  of  industry  there  is  not  only  the  incentive  to, 
but  the  facility  for,  a  system  of  highly  developed  factory  inspection  and  the 
management  of  the  associations  is  in  the  hands  of  those  best  qualified  to  superin- 
tend and  direct  preventive  activities. 

The  individual  liability  systems  provide  no  corresponding  incentive  or  facil- 
ities. Each  insurance  company  bids  for  all  classes  of  business.  Such  inspection  as 
these  companies  conduct  cannot  in  the  nature  of  things  be  as  thorough  as  in  the 
specialized  systems  of  collective  insurance,  nor  has  the  insurance  company  the 
same  intimate  interest  in  the  welfare  of  the  workman  nor  the  same  appreciation  of 

'As  to  litigation  under  English  Act,  see  24th  Rep.  U.S.  Bur.  Lab.,  1512;  see  Rep.  111. 
Com.  38. 

*  See  post,  p.  129. 
3S.  &  E.,  100,  128. 


80  CANADIAN  MANUFACTUREKS'  ASSOCIATION:  Xo.  65 

conditions  under  which  he  works  as  an  association  of  employers  would  have.  The 
insurance  company  has  no  direct  facilities  for  standardizing  machinery  nor  any 
means  of  enforcing  regulations  except  by  a  threat  to  decline  or  cancel  the  policy, 
the  coercive  effect  of  which  would  be  very  slight.  There  is  every  reason  in  fact  why 
the  factory  inspection  system  should  be  closely  co-ordinated  with,  if  not  merged 
in,  the  industrial  insurance  system.  The  inspection  would  then  be  induced  from 
within  instead  of  imposed  from  without.  It  would  be  sanctioned  by  all  the  weight 
of  co-operative  endeavor  as  well  as  of  substantive  law. 

Another  large  field  of  conservation  is  open  in  the  direction  of  expert  medical 
attendance  for  the  purpose  of  preserving  as  far  as  possible  the  industrial  useful- 
ness of  the  workman.  Excellent  results  in  this  line  of  activity  are  found  in  Ger- 
many. "Authorities  all  agree  and  are  very  emphatic  on  the  point,  that  immediate 
attention  to  all  injuries  saves  much  suffering,  many  lives  and  limbs  and  a  great 
deal  of  money.  This  principle  has  been  recognized  by  progressive  employers  and 
insurance  companies  in  the  United  States,  but  prompt  relief  is  still  lacking  in  many 
instances.  Under  the  German  law  every  injured  worker  and  his  dependants  are 
taken  care  of  automatically  and  immediately  after  the  occurrence  of  the  accident, 
on  the  theory  that  from  a  human  as  well  as  an  economic  point  of  view  it  is 
most  important  to  bring  back  every  worker  from  the  position  of  a  consuming 
member  of  society  to  that  of  a  producing  member."1  "The  Bavarian  Building 
Industries  Employers'  Association  established  to  its  own  satisfaction  that  the 
expenditure  of  approximately  $8,000  in  prompt  and  expert  medical  attention  to 
it  injured  workmen,  saved  approximately  $160,000  in  compensation  expenses. 
A  Vienna  insurance  institution  figured  the  net  savings  in  compensation  due  to  the 
establishment  of  an  ambulance  and  first  aid  medical  station  to  be  $27,000  in  nine 
months.  An  engine  driver  35  years  old  was  scalded  during  a  wreck.  The  attend- 
ing general  physician  thought  the  amputation  of  the  left  arm  necessary.  The 
employers'  association  succeeded  through  specialists'  treatment  at  its  own  hospital 
in  saving  the  arm  and  bringing  it  back  to  normal  strength.  At  the  time  of 
accident  the  driver  earned  $330  per  annum — a  few  years  later  $425  per  annum, 
which  proves  that  his  earning  capacity  was  unimpaired.  The  amputation  of  the 
arm  would  have  meant  a  cripple  with  less  than  half  earning  capacity,  and  a  life 
compensation  of  $150  annually,  equal  to  $8,000  or  $10,000  total  expenses  to  the 
Employers'  Mutual  Insurance  Association.  We  might  quote  fifty  similar  cases 
showing  the  wonderful  results  of  conserving  the  best  resources  of  the  nation,  the 
self-respect  and  earning  capacity  of  her  workers,  by  means  of  prompt  and  proper 
medical  attention."2 

For  providing  facilities  and  organization  for  this  latter  class  of  conservation 
work  no  better  avenue  appears  to  be  open  than  the  proposal  made  by  the  commission 
which  drafted  the  Washington  Act,  namely  of  a  separate  "  first  aid  fund." 
Of  this  proposal  of  the  drafting  commission,  the  report  issued  by  the  work- 
men's compensation  commission  of  the  State  of  Washington  in  February,  1912, 
speaks  as  follows:  "The  burning  issue  of  the  industrial  situation  to-day  is  the 
need  of  a  first-aid  fund.  When  the  Act  was  discussed  in  the  legislature  it 
already  bore  a  provision  for  first-aid,  which  was  stricken  mil  a1  the  urgent  request 
of  the  manufacturers,  who  declared  that  they  desired  to  establish  their  own  first 
aid  funds;  it  was  also  felt  that  the  law,  revolutionary  as  it  was  in  a  great  many 
respects,  would   prove   to  be  of  sufficient  burden  without  the  addition   of  a  first- 

'  See  Rep.  Fed.  Com.  U.S.,  686. 
2  See  S.  &  E.,  51. 
s  See  post,  p.  117. 


1912  WOKKMEJSTS  COMPENSATION  COMMISSION.  81 

aid  provision.     The  whole  matter  was   therefore  stricken   out  and   the   schedules 

designed  to  accompany  that  provision  were  allowed  to  remain  as  they  are 

It  will  be  seen  that  the  law  provides  simply  for  the  bare  necessities  of  life 

during  disability  or  after  the  death  of  a  workman,  and  the  expense  of  doctor's 
bills,  hospital  dues,  etc.,  is  absolutely  unprovided  for.  It  is  clearly  up  to  the 
employers  and  employees  of  the  State  to  give  this  question  of  first-aid  careful 
and  serious  consideration  in  as  much  as  it  constitutes,  in  the  opinion  of  the  com- 
mission, the  most  imminent  problem  in  connection  with  the  administration  of 
industrial  insurance  in  this  State  to-day."1 

It  is  suhmitted  that  in  the  administration  of  first-aid  funds  a  different  principle 
might  be  adopted  from  that  in  the  administration  of  the  compensation  fund  proper. 
It  might  be  well  to  afford  facilities  for  placing  the  administration  of  first  aid  funds, 
under  proper  supervision,  in  the  hands  of  such  benefit  societies  as  now  exist  or  others 
which  might  be  created.  It  is  submitted  that  it  would  be  advisable  to  localize  as 
far  as  possible  the  administration  of  these  funds  and  that  possibly  a  system  might 
be  worked  out  whereby  benefit  societies  would  be  created  covering  either  single 
industries  or  groups  of  related  industries  in  a  particular  geographic  district.2  Such 
variations  might  be  allowed  in  their  constitutions  as  conditions  warranted  and 
where  no  such  society  existed  the  central  administrative  body  would  have  very  little 
trouble  in  handling  the  funds. 

Eleventh:  The  system  should  be  such  as  to  secure  the  most  liberal  measure 
of  relief  possible  without  undue  strain  upon  industry. 

This  principle  is  enunciated  as  a  basis  for  a  discussion  of  the  cost  of  compensa- 
tion under  the  various  types  of  compensation  systems  and  of  the  different  actuarial 
methods  in  fixing  rates. 

The  immediate  increase  in  the  expense  to  employers  consequent  upon  the  in- 
troduction of  a  compensation  system  is,  of  course,  the  most  serious  economic  factor 
from  the  employers'  standpoint.  In  an  industry  running  on  a  small  margin  of 
profit  an  increase  of  even  two  per  cent,  on  the  pay-roll  may  make  the  difference 
between  success  and  failure.  In  addition  to  the  immediate  advantage  to  the  work- 
man in  having  provision  made  for  loss  of  earning  capacity  and  in  addition  to  the 
immediate  disadvantage  to  the  employer  in  having  his  profits  reduced,  it  is  neces- 
sary to  consider  a  number  of  consequences  flowing  from  the  imposition  of  an 
undue  burden  of  compensation. 

If  the  burden  placed  upon  employers  in  any  one  Province  exceeds  that  upon 
employers  in  other  Provinces  or  other  countries  whose  products  compete  in  the 
market  with  the  products  of  that  Province,  the  employers  of  that  Province  are  to 
the  extent  of  the  excess  at  a  disadvantage  which  will  necessarily  be  reflected  either 
upon  the  price  of  the  product  or  upon  the  demand  for  the  product.  In  either  case 
the  result  is  a  loss  which  falls  directly  upon  the  employer  and  which  is  shared  more 
or  less  directly  by  the  employee.  Apart,  therefore,  from  the  immediate  advantage 
to  the  workman  and  disadvantage  to  the  employer  it  is  important  that  the  schedule 
of  compensation  sJhould  not  be  substantially  greater  than  that  of  other  provinces 
of  Canada  and  other  jurisdictions  whose  products  compete  with  those  of  our 
industries.3 

1  See  also  statement  of  Mr.  M.  M.  Dawson,  Interim  Rep.  Ont.  Com.,  442. 

2  See  Interim  Rep.  Ont.  Com.,  195. 

3  See  Rep.  Fed.  Com.  U.S.,  29,  89. 

6   L. 


82 

i — 


CANADIAN  MANUFACTURERS'  ASSOCIATION 


No.  65 


The  increase  in  expense  incident  to  the  introduction  of  a  workmen's  com- 
pensation Act  is  indicated  by  the  following  tables  of  figures  showing  the  increase  in 
liability  insurance  rates  after  the  introduction  of  the  Acts  in  England,  the  Prov- 
inces of  British  Columbia  and  Quebec,  and  the  States  of  New  York  and  Pennsyl- 


vania. 


ENGLAND. 


1907, 

Under  Employers' 

Liability  Law. 


1908. 

Under  Workmen's 

Compensation  Law.* 


Bakeries 

Brickmaking  . . 

Carpentry  

Blast  Furnaces 
Glass  Factories 
Nail  Factories. 

Quarries 

Rolling  Mills  . . 
Tanneries 


$  c. 
0  07* 
0  10" 
0  10 
0  10 


0  10 
0  15 
0  10 


$  c. 
0  12* 
0  12* 
0  15" 
0  20 
0  10 
0  20 
0  20 
0  20 
0  10 


$  c. 


1  00 


1  50 


$  c. 
1  12* 
1  50" 


1  62£ 
1  50 

0  85 

1  25 

2  25 
1  87J 
1  25 


*  it  should  be  remembered  that  these  rates  have  been  several  times  raised  since,  and  it  is 
now  absolutely  necessary  to  make  another  general  advance. 


PROVINCE  OF  BRITISH  COLUMBIA. 


Under 

Liability 

Law. 


Under  Workmen's 

Compensation 
(English  system). 


Bakeries 

Brickmaking  . . . 

Carpentry    

Blast  Furnaces  . 
Glass  Factories. 
Nail  Factories . . 
Quarries  (stone) 
Rolling  Mills  . . . 
Tanneries 


$  c. 


0  15 


$  c. 
0  17 

0  42 

1  50 
0  49 
0  42 
0  42 

2  10 
0  52 
0  23 


$  c. 


0  88 


$  c. 
0  89 


1 
2 

1 


26 
00 
36 
1  26 

1  44 
4  06 

2  17 
1  13 


PROVINCE  OF  QUEBEC. 


Under 

Liability 

Law. 


Under  Workmen's 

Compensation 
(English  system). 


Bakeries 

Brickmaking  . . . 

Carpentry    

Blast  Furnaces  . 
Glass  Factories. 
Nail  Factories . . 
Quarries  (stone) 
Rolling  Mills  . .. 
Tanneries 


$  c. 


0  15 


$  c. 
0  17 

0  42 

1  50 
0  49 
0  42 
0  42 

2  10 
0  52 
0  23 


$  c. 


1  47 


c. 
37 
10 
00 
90 
10 


2  40 
6  25 

3  61 
1  73 


1  Taken  from  brief  of  Miles  M.  Dawson,  Rep.  Fed.  Com.  U.S.,  282. 


1912 


WORKMEN'S  COMPENSATION  COMMISSION. 


STATE  OF  NEW  YORK. 

The  following  comparison  shows  the  rates  of  employers'  liability  insurance 
before  and  after  the  Workmen's  Compensation  Act  of  1909,  since  declared  uncon- 
stitutional : 


Employers' 

Workmen's 

Liability  Law.   1 

Compensation 

$  c. 

$  c. 

1  75 

5  00 

4  50 

12  50 

2  00 

7  50 

2  50 

10  00 

4  50 

12  50 

2  00 

6  25 

Carpentry  

Bridge  Building  (iron) 

Quarries  (stone) 

Railways  (steam) 

Tunnelling 

House-smithing 


The  following  rates  are  taken  from  the  schedule  recently  quoted  by  insurance 
companies  under  the  New  Jersey  Act : 

$  c.         $  C. 

Bakeries 1  25  to  1  50 

Brickmaking 2  00  to  3  00 

Carpentry 2  00  to  3  75 

Blast  Furnaces 4  00  to  5  00 

Glass  Factories 1  25  to  2  00 

Nail  Factories 2  00  to  0  00 

Quarries 5  00  to  6  50 

Rolling  Mills 3  00  to  5  25 

In  comparing  these  rates  consideration  must,  of  course,  be  given  to  the  rela- 
tive benefits  under  the  respective  systems.  Thus  a  recent  report  has  shown  that  in 
England  the  average  compensation  in  fatal  accidents  has  'been  about  $750.  What 
would  the  rate  have  been  to  give  a  benefit  corresponding  to  that  in  the  State  of 
Washington  I1 

The  probable  increase  in  employers'  liability  rates  which  would  result  upon  the 
introduction  in  Ontario  of  an  Act  giving  benefits  equivalent  to  those  under  the 
English  Act  has  been  conservatively  estimated  at  400  per  cent.2  and  the  rate  of 
increase  which  would  follow  the  introduction  of  a  scale  of  benefits  like  that  of  the 
State  of  Washington  would  be  much  larger.  It  must  be  noted  also  that  recent 
statistics  show  the  absolute  necessity  of  an  increase  in  the  rates  in  England.3  An 
increase  in  expense  to  the  employer  such  as  that  indicated  above  would  involve  a 
very  serious  shcck  to  the  industries  of  the  Province;  and  the  proposition  of  in- 
troducing a  system  involving  this  expense  would  meet  with  great  opposition. 

Under  the  current  cost  plan  of  insurance  outlined  below4  a  collective  or  state 
insurance  system  could  be  established  at  an  immediate  annual  cost  not  greater  than 
that  of  the  present  liability  insurance  rates.6  Under  this  plan  instead  of  capital- 
izing the  peiiodical  payments  due  to  the  injured  workman  or  his  dependents  and 
setting  aside  a  lump  sum  to  provide  for  these  payments,  only  the  current  cost  of 
meeting  the  yearly  payment  would  be  assessed  each  year  with  a  small  margin  for  an 

1  See  post,  p.  99. 

2  See  statement  of  Chas.  H.  Neely,  Interim  Rep.   Ont.  Com.,  233. 

3  See  post,  p.  106. 

4  See  post,  p.  108. 

5  See  Rep.  Fed.  Com.  U.S.,  102. 


84  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

f . 

smergency  reserve  fund.  The  animal  assessments  would  increase  as  the  number  of 
dependants  increased  and  the  annual  rate  would  only,  reach  its  maximum  after  a 
period  of  twenty-five  or  thirty  years.  This  was  the  actuarial  plan  adopted  in  the 
German  system.  It  represents  a  minimum  strain  upon  present  industry  and  does 
not  involve  the  shock  to  the  economic  system  which  is  incidental  to  a  system  where 
the  cost  of  compensation  is  capitalized  at  the  time  of  the  injury.1 

Under  a  system  of  individual  liability  with  its  attendant  system  of  employers' 
liability  insurance  it  is,  of  course,  necessary  also  to  capitalize  the  compensation,  and 
one  of  the  defects  of  the  English  system  is  that  it  produces  a 'maximum  strain  upon 
the  industry  by  withholding  from  active  industrial  operations  an'  immense  amount 
of  capital  which  is  held  by  insurance  and  trust  companies  to  meet  future  compensa- 
tion payments  or  is  deposited  in  trust  accounts  of  judges  to  meet  future  com- 
pensation payments.2  In  fact  one  of  the  complaints  against  the  present  German 
system  is  that  the  margin  of  approximately  9%  per  cent,  of  the  premium  rate 
regularly  set  aside  for  a  reserve  fund  is  too  large  and  that  the  capital  should  be  left 
in  active  use  in  the  industry/  but  under  a  system  of  trade  associations,  such  as  that 
of  Germany,  the  accumulation  of  a  reserve  fund  is,  of  course,  more  of  a  necessity 
than  it  would  be  under  a  system  controlled  and  administered  by  the  state  itself. 

The  individual  liability  system  also  on  account  of  its  wastefulness  necessitates 
the  payment  of  insurance  premiums  approximately  double  those  required  to  confer 
corresponding  benefits  under  a  collective  system.  The  question  of  the  amount  of 
benefit  to  be  allowed  by  a  compensation  Act  will,  therefore,  depend  directly  and  very 
largely  upon  the  nature  of  the  system  adopted. 

Thus  the  amount  of  compensation  to  be  paid  under  a  compensation  Act  will  be 
influenced  largely  by  three  considerations :  First,  whether  an  individual  liability 
or  a  collective  or  state  liability  system  is  adopted;  second,  whether  the  capitalized 
or  the  current  cost  plan  of  insurance  is  adopted,  and  third,  whether  the  workmen 
contribute  toward  the  insurance  fund  or  not.  Subject  to  these  contingencies  and 
within  the  limits  imposed  by  the  ability  of  the  business  to  bear  the  expenses  of  com- 
pensation payments  it  ought,  of  course,  to  afford  as  large  a  measure  of  relief  as 
possible  to  the  workman  without  offering  inducements  to  fraud. 

The  usual  basis  for  computing  the  amount  of  compensation  is  upon  the  diminu- 
tion of  earning  capacity.  Where  the  result  of  the  injury  is  total  incapacity  a  per- 
centage of  the  weekly,  monthly  or  yearly  wage  is  paid ;  and  where  the  incapacity  is 
partial  a  similar  percentage  is  allowed  upon  the  impairment.  This  basis  appears 
most  just  as  well  as  convenient  and  presents  the  least  temptation  for  malingering 
end  fraud.  Some  systems  have  adopted  arbitrary  schedules  of  values  for  the  loss 
of  different  portions  or  functions  of  the  body,  allowing  the  payment  of  so  much  for 
a  finger,  so  much  for  an  eye  and  the  like.4  But  the  generally  accepted  basis  of 
compensation  is  incompatible  with  such  a  practice.  The  pervading  idea  of  modern 
systems  is  to  supply  or  supplement  the  income  destroyed  or  impaired  by  reason  of 
the  injury.  The  compensation  is  given  by  way  of  making  up  for  lost  earning  power 
rather  than  by  way  of  satisfaction  or  retribution.5  Two  important  consequences 
follow  upon  this  view  of  compensation.  It  follows  in  the  first  place  that  the  com- 
pensation should  cease  with  the  necessity  for  it.     If,  for  instance,    a  workman  is 

1  See  statement  of   Miles  M.   Dawson,  Rep.   Fed.   Com.   U.S.,   100    et  seq.,   and   brief 
ib,  pp.  270,  276. 

2  See  F.  &  D.,  23;   S.  &  E.,  206;   Rep.  Fed.  Com.  U.S.,  676. 
Sco  S.  &  E.,  115. 

4  See  Rep.  Fed.  Com.  U.S.,  783. 

5  See  ante,  p.  65;  see  also  F.  &  D.,  9,  and  statement  of  J.  A.  Emery,  Rep.  Fed.  Com. 
U.S.,  1088. 


1912  WORKMEN'S  COMPENSATION   COMMISSION'.  85 

found  after  an  injury  to  be  in  a  position  to  earn  an  income  equal  to  that  enjoyed 
before  the  injury  he  would  not  be  entitled  under  this  view  to  a  continuance  of  his 
compensation.  In  many  cases  an  injury  may  be  the  occasion  of  a  change  of  occu- 
pation by  which  earning  power  is  increased,  and  in  such  cases  payment  should 
entirely  cease.  If  a  young  man  by  reason  of  the  loss  of  an  arm  should  abandon  an 
occupation  involving  manual  labour  and  enter  a  professional  occupation,  earning 
a  higher  remuneration  than  he  enjoyed  before,  there  is  no  reason  why  he  should 
remain  any  longer  a  pensioner  upon  the  insurance  fund.  In  some  systems  indeed 
the  recipient  is  in  such  cases  required,  when  he  is  in  a  position  to  do  so.  to  refund 
a  portion  of  the  payments  made  to  him  during  incapacity.1  It  is  quite  possible 
that  in  many  cases  it  would  be  more  convenient  and  less  expensive  to  settle  for 
minor  injuries  on  a  lump  sum  basis;  but  consideration  of  occasional  convenience 
may  well  give  way  to  the  expediency  of  maintaining  the  general  principle.2  Another 
result  of  this  view  is  that  in  case  of  death  by  injury,  compensation  is  paid  only  to 
actual  dependents.  Where  no  dependency  exists  there  is  no  reason  for  making  the 
system  a  source  of  profit  because  of  the  existence  of  family  relationship  more  or  less 
remote.  The  occurrence  of  an  injury  should  not  be  the  occasion  for  the  enrichment 
of  persons  not  dependent  upon  the  earnings  of  the  injured  workman.  This  prin- 
ciple is  in  accord  with  the  common  law  rule  and  with  the  statutes  of  the  Province. 
The  above  observations  are,  of  course,  applicable  only  to  cases  of  deprivation  of  in- 
come and  do  not  apply  to  such  items  as  medical  or  funeral  expenses. 

It  is  submitted,  therefore,  that  the  basis  of  compensation  ought  to  be  a  fixed 
proportion  of  the  impairment  of  earning  capacity,  with  a  certain  fixed  minimum. 
Under  the  Act  of  the  State  of  Washington  the  payment  in  cases  of  total  disability  is 
a  pension  of  from  $20  to  $35  per  month  according  to  the  number  of  dependants. 
Such  a  fixed  sum  involves  the  anomaly  that  a  workman  or  his  dependents  may 
receive  as  compensation  an  income  equal  to  or  greater  than  that  enjoyed  before  the 
injury.  At  the  same  time  it  must  be  remembered  that  this  rate  of  compensation 
represents  in  the  case  of  each  capital  injury,  i.e.,  total  incapacity  or  death,  a  capital 
sum  of  $4,000  which  is  on  a  higher  scale  than  has  probably  been  contemplated  by 
anj'one  in  this  Province.  It  may  be  found  that  a  scale  of  50  per  cent,  of  wages 
would  bring  the  capital  amount  even  higher  than  $t,000. 

It  is  submitted,  therefore,  that  while  compensation  based  upon  a  percentage 
of  wages  appears  most  reasonable  and  desirable  careful  consideration  should  be 
given  to  the  question  of  the  capital  amount  represented  by  the  scale  of  compensation, 
and  the  fixing  of  a  reasonable  maximum  capital  sum. 

It  is  submitted,  also,  that  in  the  case  of  permanent  partial  disability  the  com- 
pensation should  be  a  periodical  payment  on  the  basis  of  impairment  of  earning 
capacity.  This  payment  should  be  adjusted  from  time  to  time  and  should  be 
entirely  withdrawn  when  it  is  found  that  the  workman  is  in  a  position  to  earn 
as  much  as  he  did  before  the  injury.  Where  there  are  no  real  dependents  no 
compensation  should  be  allowed  beyond  medical  and  funeral  expenses. 

Twelfth  :     The  system  should  be  such  as  to  afford  some  promise  of  permanency. 

If  the  experience  of  other  jurisdictions  proves  anything,  it  is  that  no  system 
of  individual  employers'  liability  affords  a  permanent  solution  of  the  problem  of 
workmen's  compensation.3     The  English  Act  is  regarded  by  all  observers  as  repre- 

1  See  24th  Rep.  U.S.,  Bur.  Lab.,  2022. 

-  See  24th  Rep.  U.S.,  Bur.  Lab..  40. 

3  For  historical  sketch,  see  Rep.  Fed.  Com.  U.S.,  pp.  110,  111;  see  also  F.  &  D.,  18. 


86  CANADIAN  MANUFACTURERS'  ASSOCIATION :  No..  65 

senting  merely  a  stage  in  the  development  of  a  satisfactory  compensation  system.1 
The  present  demand  in  England  for  a  compulsory  insurance  system2  was  anticipated 
in  the  report  of  the  Departmental  Committee  of  1904.3  In  the  Province  of 
Manitoba,  where  an  Act  along  the  lines  of  the  English  Act  was  adopted  in  1909, 
there  is  already  a  demand  for  a  compulsory  insurance  system.  Similar  conditions 
exist  in  other  jurisdictions  where  individual  liability  systems  have  been  introduced. 

It  may  be  pointed  out  further  that  the  collective  system  of  Germany  promises 
to  develop  into  something  more  nearly  approaching  a  state  insurance  system.  The 
most  cogent  of  the  few  constructive  criticisms  of  Dr.  Friedensburg  points  strongly 
to  an  ultimate  assimilation  of  the  various  mutual  associations  of  Germany  under 
closer  state  control.4  In  Sweden,  likewise,  where  there  is  a  system  of  state  insur- 
ance with  the  option  of  insuring  in  private  companies,  the  state  scheme  has  been 
gradually  absorbing  the  business  of  its  competitors  owing  to  their  inability  to  com- 
pete with  it,5 

Speaking  generally  of  the  systems  of  Europe  Messrs.  Frankel  &  Dawson  say: 
"There  is  now  observable  a  strong  disposition  to  compel  employers  to  insure  and 
either  to  foster  the  establishment  of  a  state  insurance  department  as  a  monoply  or 
else  to  create  other  obligatory  insurance  institutions  conducted  under  the  super- 
vision of  the  state."6 

It  may  be  argued  that  as  a  collective  or  state  insurance  system  appears  to  be 
the  ultimate  solution  there  should  be  no  objection  to  the  development  of  such  a 
system  through  the  stage  of  an  employers'  liability  system.  The  answer  to  this 
is  that  an  employers'  liability  system  involves  two  large  economic  disturbances, 
while  the  introduction  of  a  collective  or  state  insurance  system  need  involve  only  one 
lesser  disturbance.  The  introduction  of  an  individual  liability  system  which  must 
necessarily  be  upon  a  capitalized  plan  would  be  in  itself,  as  has  been  pointed  out, 
a  very  direct  and  severe  strain  upon  present  industry.  In  addition  to  this  it  would 
involve  the  creation  of  an  immense  employers'  liability  insurance  interest  which 
must  be  wiped  out  upon  the  introduction  of  a  collective  or  state  system,  and  which, 
in  the  meantime  would  stand  in  the  way  of  the  introduction  of  a  collective  or  state 
system.1  Liability  insurance  companies  recognizing  the  instability  of  their  busi- 
ness must  necessarily  provide  against  it,  and  this  provision  can  be  made  only  by 
way  of  an  increase  of  the  burden  upon  industry.  In  the  meantime,  also,  while  the 
individual  liability  system  is  in  operation,  it  entails  a  continuous  waste  which  is  in 
itself  a  serious  drain  upon  industry.  A  state  or  collective  system  on  the  other 
hand  could,  as  has  been  pointed  out,  be  introduced  with  a  minimum  shock  to 
economic  conditions,  and  there  is  every  reason  to  anticipate  for  such  a  system  a  per- 
manency which  an  individual  liability  system  fails  to  promise. 

'See  31  Can.  L.  T.,  858;  Cd.  2208,  p.  123;  extract  post,  p.  96;  24th  Rep.  U.S.  Bur. 
Lab.,  1498;   Rep.  Fed.  Com.  U.S.,  943. 

2  Rep.  Fed.  Com.  U.S.,  113,  117,  also  Interim  Rep.  Out.  Com.,  174;   F.  &  D.,  46. 

"  See  Cd.  2208,  pp.  117,  121. 

4  Praxis  der  deutschen  Arbeiterversicherung,  48;  Friedensburg  (Gray),  62.  Work- 
ingmen's  insurance  can  be  truly  beneficial  in  its  operation  only  when,  free  from  all 
exaggeration  and  excess,  and  especially  from  conscious  or  unconscious  subservience  to 
thie  lower  classes,  it  works  -as  an  institution  of  the  State,  as  impartial  as  every  other 
kindred  institution." 

»F.  &  D.,  38. 

•See  F.  &  D.,  138. 

7  See  Rep.  Fed.  Com.  U.S.,  113. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  87 

ANALYSIS  OF  COMPENSATION  SYSTEMS. 
Classification  of  Compensation  Systems. 

It  has  been  the  practice  with  writers  upon  the  subject  of  workmen's  compensa- 
tion to  classify  the  systems  of  the  different  jurisdictions  with  reference  to  the  type 
of  insurance  established  under,  or  evoked  by,  the  system.1  Thus  the  systems  have 
been  classified  under  such  heads  as  voluntary  insurance,  compulsory  insurance,  com- 
pulsory mutual  insurance,  compulsory  state  insurance,  state  adjustment  with  free 
insurance,  five  insurance  with  state  competition,  free  insurance  with  state  guarantee, 
and  the  like.  These  designations  are,  no  doubt,  descriptive  and  they  are  certainly 
less  disingenuous  than  the  very  ingenious  nomenclature  recently  employed  by  repre- 
sentatives of  the  liability  insurance  interests  in  discussing  the  subject,2  but  they  do 
not  involve  a  recognition  of  the  vital  distinctions  which  form  the  real  basis  of 
classification.  The  real  distinction  is  not  between  the  classes  of  insurance  but  in 
the  incidence  of  the  initial  liability.  Where  the  liability  to  compensate  the  work- 
man is  thrown  directly  upon  the  individual  employer  the  obligations  and  relations 
created  are  of  a  nature  radically  different  from  those  which  arise  where  the  liability 
is  thrown  upon  employers  collectively,  or  where  the  liability  is  assumed  by  the  state 
itself.  And  the  essential  character  of  every  system,  in  theory  and  in  practice,  is 
determined  by  the  question  which  of  the  three  principles  is  adopted,  individual 
liability,  collective  liability  or  state  liability.  Of  the  three  the  two  last  are  the 
most  nearly  akin  and  there  would  be  some  reasons  for  classifying  the  different 
systems  under  two  heads  only,  namely,  individual  liability  and  collective  liability, 
the  state  liability  system  being  considered  merely  a  more  widely  diffused  form  of 
collective  liability.  There  is,  however,  an  important  distinction  between  a  system 
such  as  that  of  Germany  where  the  state  uses  its  compulsive  power  merely  for  the 
purpose  of  organization  and  a  system  such  as  that  of  the  State  of  Washington 
where  the  state  itself  assumes  the  burden  as  well  as  the  administration  of  the  com- 
pensation. In  practice  it  is,  of  course,  possible  to  operate  a  state  insurance  system 
in  such  a  manner  as  to  render  it  to  all  intents  and  purposes  a  collective  liability 
system.  And  on  the  other  hand  there  is  no  doubt  that  a  collective  liability  system 
under  state  compulsion  secures  by  reason  of  the  participation  of  the  state,  a  stability 
which  places  it  in  many  respects  on  a  par  with  a  state  liability  system.3 

It  should  be  observed  also  that  the  mere  creation  of  state  insurance  facilities 
does  not  fix  the  character  of  the  system  as  a  state  liability  system.  Thus  in  some 
jurisdictions  the  state  competes  on  more  or  less  equal  terms  with  private  insurance 
schemes  for  the  patronage  of  employers  insuring  their  individual  liability.4 

Such  a  system  might  be  described  as  a  state  insurance  system,  but  it  is  not  a 
state  liability  system  in  the  sense  here  employed. 

It  may  be  well  to  define  further  and  distinguish  the  three  classes  of  compensa- 
tion systems,  and  to  enumerate  their  respective  advantages  and  disadvantages. 

'See  Cd.  2458,  p.  3;   Bulletin  90,  U.S.  Bur.  Lab.,  720. 

2  In  a  memorandum  submitted  before  the  Federal  Commission,  U.S.,  by  "Certain 
law  members  of  the  Committee  of  the  Official  Civic  Federation,"  the  individual  liability- 
system,  of  which  the  English  Act  is  a  type,  was  spoken  of  as  "simple  compulsory  com- 
pensation," and  other  systems  are  referred  to  as  more  or  less  elaborate  and  complex 
developments  of  this  type,  while  the  fact  is,  as  has  been  shown,  that  individual  liability 
plan  is  most  indirect  in  its  operation  and  complex  in  its  relations  and  results.  See 
Rep.  Fed.  Com.  U.S.,  433. 

3  See,  however,  letter  of  Mr.  Harold  Preston,  post,  p.  122. 
*E.g.,  Sweden;  see  F.  &  D.,  38. 


88  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


Individual  Liability.  • 

Under  an  individual  liability  system  the  obligation  to  compensate  the  work- 
man is,  as  has  been  pointed  out,  thrown  directly  upon  the  individual  employer  as 
an  element  of  the  relationship  of  employer  and  employee.  The  law  implies  a  term 
in  every  contract  by  which  the  employer  assumes  an  obligation  more  or  less  extensive 
to  indemnify  the  workman  for  injuries  received  in  the  course  of,  or  in  connection 
with,  the  employment.  The  injured  employee  looks  for  relief  to  his  employer,  the 
latter  being  thus  constituted  an  individual  insurer  of  the  workman  against  accident. 
Employers  under  such  a  system  are,  of  course,  permitted,  and  in  fact  encouraged, 
to  insure  themselves  against  their  liability  by  some  form  of  insurance.  The  con- 
tract of  insurance  in  such  cases,  however,  assumes  the  form  of  an  undertaking  on 
the  part  of  the  insurance  company  to  indemnify,  not  the  workman  against  loss  by 
injury,  but  the  employer  against  loss  through  the  enforcement  of  the  workman's 
claim  against  him  as  employer.  The  circuity  of  liability  thus  established  involves 
many  important  consequences  which  will  be  presently  noted. 

The  chief  exponent  and  type  of  the  individual  liability  system  is  the  English 
"Workmen's  Compensation  Act.  There  can  be  little  doubt  that  the  character  of  this 
Act  was  determined  largely  by  the  absence  in  England  of  facilities  in  the  form  of 
trade  associations  corresponding  to  those  which  were  taken  advantage  of  by 
Bismarck  in  the  German  legislation  of  1884.  And  it  may  be  assumed  also,  that  the 
individualistic  genius  of  the  British  nation  and  the  reluctance  to  accept  Socialistic 
doctrines  and  bureaucratic  methods  had  their  influence.  While  the  English  Act  was 
confessedly  intended  to  embody  the  principles  of  the  German  system  it  was  hoped 
to  render  the  principles  more  palatable  by  avoiding  the  use  of  compulsion.  It  was 
expected  that  the  self-interest  of  the  employer  would  supply  the  necessary  incentive 
to  take  out  insurance.1  The  essential  character  of  the  insurance  thus  induced,  and 
the  essential  departure  from  the  German  collective  liability  principle,  were,  per- 
haps, not  appreciated.  It  is  needless  to  say  that  the  results  anticipated  of  the 
English  Act  have  not  been  realized  and  that  a  large  proportion  of  employers  in 
England,  and  chiefly  among  those  who  need  it  most  carry  no  insurance  whatever.2 
There  is  little  doubt,  also,  that  it  was  hoped  under  the  English  Act  to  induce  the 
establishment  of  associations  similar  to  those  of  Germany  but  on  a  voluntary  instead 
of  a  compulsory  basis.3  This  hope  has  been  entirely  dispelled  and  the  tendency 
is  rather  towards  the  extinction  of  those  schemes  which  existed  before  the  passing  of 
the  Act.4 

The  English  Act  is  in  essence  an  employers'  liability  act,  and  not  a  work- 
men's compensation  act  in  the  modern  sense  of  the  term.5  By  throwing  upon  the 
individual  employer  a  liability  for  damage  not  due  to  his  fault  it  violates  elemen- 
tary principles  of  justice.  It  is  not  an  accidental  misfortune  that  the  American 
constitutions  render  it  difficult,  if  not  impossible,  to  enact  an  Act  of  the  English 
type.  The  constitutional  provisions  which  create  the  difficulty  are  in  reality 
expressive  of  principles  of  natural  justice  A  burden  which  may  with  justice  be 
placed  upon  a  group  or  class  may  be  entirely  unjust  when  placed  upon  an  in- 
dividual/' 

1  See  Rep.  Fed.  Com.  U.  S.,  111. 

2  See  Cd.  2208,  p.  43. 

3  See  Rep.  Fed.  Com.  U.  S.,  112. 

4  See  Cd.  22'08,  p.  23;  Rep.  Fed.  Com.  U.  S..  112;   F.  &  D.,  27,  28,  46;   24th  Rep.  IT.  S. 
Bur.  Lab.,  1531,  1579. 

"See  Rep.  Fed.  Com.  U.  S.,  110,  111,  270;   St.  Louis  Pamphlet,  11. 
•  See  Rep.  Fed.  Com.  TJ.  S.,  69. 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  89 

— — ■ — ■ — i 

The  report  of  the  Commission  of  the  State  of  Washington  speaks  of  the 
individual  liability  scheme  as  follows :  "Other  Commissions  have  seemed  to  favor 
the  placing  of  the  liability  directly  upon  the  employer,  that  is  to  say  they  favor 
fixing  a  fchedule  of  compensation  to  injured  workmen  and  their  families,  and 
providing  l.  at  in  each  ease  each  employer  shall  pay  the  stated  sum  to  the  injured 
employee,  or  in  case  of  his  death,  to  his  family,  and  it  is  expected  (in  fact,  it  is 
the  ease  in  New  York,  where  an  optional  statute  was  this  year  enacted)  that 
employers  will  then  write  employers'  liability  insurance  to  protect  them  in  such 
cases,  and  thereby  distribute  the  burden.  This  plan  has  not  met  with  the  favor 
of  your  Commission  for  the  reason  that  it  still  retains  the  elements  of  waste  and 
litigation.  It  seems  to  us  better,  for  both  employer  and  employee,  that  all  the 
money  that  employers  pay  out  on  account  of  such  cases  shall,  every  cent  of  it,  go  to 
the  injured  workman.1 

One  very  serious  difficulty  in  connection  with  a  system  of  individual  employers' 
liability  is  as  already  pointed  out,  the  danger  of  the  employer's  becoming  insolvent 
after  a  period  of  years  and  after  the  business  has  acquired  a  list  of  compensation 
pensioners  who  are  being  supported  out  of  its  pay-roll.  In  order  to  meet  this  condi- 
tion the  English  Act  of  1897  gave  the  workman  a  first  charge  on  any  sum  due  from 
the  insurance  company.  The  Act  of  1906  provides  that  in  case  of  the  bankruptcy 
of  an  employer  his  rights  as  against  the  insurance  company  shall  rest  in  the  work- 
man. It  needs  only  a  moment's  reflection  to  realize  the  immense  complexity  which 
such  provision  may  give  rise  to.  Take  for  example  the  case  of  a  commercial  com- 
pany which  has  accumulated  a  number  of  pensioners.  In  case  of  bankruptcy  or 
winding  up  the  pensions  could  doubtless  be  in  some  way  capitalized  and  assured  to 
the  workmen.  But  what  is  there  to  prevent  the  company  from  disposing  of  its 
whole  assets  and  undeitaking  without  going  into  bankruptcy?  Tn  order  to  prevent 
this  it  would  be  necessary  to  give  the  workman  a  preferential  lien  upon  the  assets 
of  the  company,  which  would  follow  the  assets  into  the  hands  of  an  innocent  pur- 
chaser. This  again  would  tie  up  the  assets  of  the  company  and  prevent  them 
from  being  sold,  unless  some  scheme  could  be  formulated  for  placing  a  reserve  fund 
in  the  hands  of  trustees  or  the  Government  against  the  claims  of  pensioners.  If 
such  a  system  of  liens  were  adopted  a  railway,  for  instance,  would  be  unable  to 
sell  any  of  its  rolling  stock  without  satisfying  the  lien  of  injured  workmen  and 
their  dependents.  This  is  the  fatal  defect  of  such  systems  as  that  just  adopted 
by  the  Congress  of  the  United  States.  It  involves  one  of  three  alternatives: 
either  the  compensation  payments  are  subject  to  the  danger  of  being  cut  off  by 
a  sale  of  the  railway's  assets,  or  the  assets  must  be  subjected  to  a  lien,  or  the 
capitalized  value  of  the  assets  must  be  set  aside  in  a  fund. 

The  defects  of  the  individual  liability  system  have  already  been  indicated. 
They  may  be  summarized  as  follows  :2 

1.  An  individual  liability  system  affords  no  assurance  of  solvency.3  It  fails 
where  and  when  it  is  most  needed,  namely,  in  the  case  of  the  smaller  and  more 
improvident  classes  of  employers4  and  in  the  case  of  larger  accidents  to  the  larger 
employers.5 

1  See  Rep.  Wash.  Com.,  8. 

-See    Rep.    Ohio   Com.,    Pt.    I,   p.    16;    Rep.    Mich.    Com.,    132,    133;    Rep.    Fed.    Corn., 
pp.  283,  650-5;  F.  &  D.,  17. 
a  S.  &  E.,  2-7. 

4  See  Cd.  2208,  p.  112. 

5  In  the  ordinary  policy  in  this  country  companies  limit  their  liability  on  a  single 
accident  to  $15,000.     For  additional  protection  higher  rates  are  charged. 


90  CANADIAN  MANUFACTUEEKS'  ASSOCIATION:  No.  65 

2.  The  individual  liability  system  handicaps  the  smaller  employer  by  throwing 
upon  him  the  risk  of  being  rendered  insolvent  by  an  accident.1  It  is  on  this  account 
not  adapted  for  extension  to  such  occupations  as  farming,  which  is  in  this  country 
usually  conducted  with  only  one  or  two  employees. 

3.  An  individual  liability  system  affords  very  little  direct  incentive  to  preven- 
tion. The  competition  for  business  renders  it  impracticable  to  classify,  and  dis- 
criminate amongst,  risks  on  the  basis  of  relative  hazard,  the  result  being  that  the 
business  is  bulked  and  tbe  more  careful  employer  made  to  bear  the  insurance  of  the 
less  careful.2 

4.  Because  of  the  circuity  of  obligation  involved  in  employers'  liability  insur- 
ance the  individual  liability  system  is  extremely  wasteful.3 

5.  The  individual  liability  systems  do  not  afford  proper  facilities  for  the 
administration  of  periodical  payments.  The  responsibility  of  making  these  pay- 
ment cannot  well  be  assumed  by  the  smaller  individual  employer,  and  the  constant 
tendency  of  employers  and  insurance  companies  is  to  commute  the  payments  for  a 
lump  sum  and  thus  impair  the  efficiency  of  the  system.4 

6.  The  individual  liability  system  creates  a  hardship  for  certain  cla=ses  of 
workmen  by  militating  against  the  employment  of  older  and  partially  incapacitated 
workmen.5 

7.  The  workmen's  recourse  being  in  each  case  against  the  individual  employer 
Bvery  claim  for  compensation  involves  a  direct  contest  inimical  to  harmonious 
relations.6 

8.  The  individual  liability  system  involves  a  violation  of  natural  justice  in 
throwing  upon  the  individual  employer  liability  for  something  which  may  not  have 
been  occasioned  by  his  fault,  but  which  on  the  contrary  may  have  bean  occasioned  by 
the  person  making  the  claim.7 

9.  Experience  shows  that  an  individual  liability  system  cannot  be  permanent 
but  must  apparently  sooner  or  later  give  way  to  a  system  of  collective  liability.8 

10.  The  individual  liability  system  gives  rise  to  an  anomalous  form  of  insur- 
ance prejudicial  in  many  respects  to  the  interest  of  both  employers  and  employees.9 

11.  An  individual  liability  system  cannot  be  conducted  on  the  current  cost  or 
assessment  plan,  but  requires  a  setting  up  of  reserves  against  future  periodical  pay- 
ments.10 

12.  The  individual  liability  system  even  under  simplified  legal  process  involves 
an  excess  and  unnecessary  amount  of  litigation.11 

Collective  Liability. 

Under  a  collective  liability  system  the  obligation  to  compensate  the  workman 
is  thrown  upon  employers  collectively  in  groups.  The  method  of  grouping  varies 
under  different  systems.  In  Germany  employers  are  divided  into  some  114  groups 
according  to  industries.     In  Austria  the  primary  division  of  geographical,  but  in 

1  See  Rep.  Conf.  Com.,  19;  Interim  Rep.  Ont.  Com.,  165. 
-See  F.  &  D.,  136,  138. 

;See  Cd.  2208,  68,  86;  Rep.  Fed.  Com.  U.S.,  112;  F.  &  D.,  15,  17. 
4S.  &  E.  231;    Cd.  2208,  39,  40;   F.  &  D.,  16. 

'S.  &  E.,  179,  180,  253,  254;    Cd.  2208,  1904,  39;   F.  &  D.,  15,  16,  48;    Mackenzie  vs. 
Iron  Trades  Emp.  Ass'n.,  1909,   Scots  L.  T.,  505. 

"See  F.  &  D.,  16,  17,  46;  Rep.  Fed.  Com.  U.S.,  727. 

'  See  ante,  p.  65. 

"  See  ante,  p.  86. 

'  See  post,  p.  102. 

,u  See  post,  p.  108. 

"  Sep  S.  &  E.,  207;   Bevan  on  Workmen's  Comp.,  4th  ed.,  pref.,  13. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  91 

each  geographical  district  employers  are  subdivided  by  industries.  Under  the  Act 
ot  the  State  of  Washington  the  grouping  is  by  estimated  hazards  of  risk.  Provision 
is  made  in  all  these  systems  for  levying  upon  employers  insurance  premiums  accord- 
ing to  the  hazard  of  the  employment,  and  out  of  the  fund  thus  raised  compensation 
is  paid  directly.  The  injured  workman  looks  for  compensation  not  to  the  individual 
employer  but  to  the  association  or  group  of  employers.  Adjudication  is  in  these 
systems  merely  a  matter  of  establishing  a  claim  upon  the  fund  and  does  not  involve 
a  legal  contest  between  the  employer  and  the  workmen. 

The  principle  of  collective  liability  has  been  embodied  in  a  number  of  Euro- 
pean systems  and  in  some  of  the  States  of  the  United  States.  The  Act  recently 
adopted  in  the  State  of  Massachusetts  is  evidently  intended  to  embody  the  principles 
of  the  German  Act  and  similar  Acts  have  been  introduced  in  Michigan  and  New 
York.  The  German  system  being  the  oldest  and  most  elaborately  and  scientifically 
developed  is  usually  cited  as  the  type1  but  there  are  many  variations  in  the  applica- 
tion in  different  jurisdictions,  of  the  basic  principles  of  the  German  system.  Jt 
should  be  observed  that  the  German  system  is  not  a  state  insurance  system,2  the 
state  participates  only  to  the  extent  of  compelling  employers  to  organize.  It  also 
assists  in  defraying  the  expense  of  compensation.  Having  compelled  the  employers 
to  organize  the  State  stands  aside  and  acts  only  in  a  supervisory  capacity.8 

It  has  been  pointed  out4  that  the  Act  of  the  State  of  Washington  while  in  form 
a  State  liability  Act  is  in  reality  based  upon  the  same  principles  as  the  German 
system,  with  this  variation,  that  instead  of  merely  organizing  the  employers  the 
State  provides  the  machinery  for  administration  and  does  not  leave  this  to  auto- 
nomous action  on  the  part  of  the  various  groups  of  employers.  The  State  does 
not  guarantee  the  payment  of  the  compensation  though  doubtless  a  practical 
guarantee  exists  in  virtue  of  the  existence  of  machinery  for  levying  the  cost 
upon   employers   collectively. 

The  collective  liability  systems  are  uniformly  conceded  to  be  the  most  satis- 
factory both  in  theory  and  in  practical  results.  The  type  system,  that  of  Ger- 
many, is  the  outstanding  example  of  a  successful  solution  of  the  problem  of 
accident  compensation.0  Representatives  of  the  liability  insurance  business  in 
the  United  States  frankly  admit  the  excellence  of  the  German  system,  and  Dr. 
Friedensburg,  whose  criticisms  of  certain  details  of  the  German  system  have  I  een 
given  wide  circulation  by  the  liability  insurance  companies  has  declared  that 
he  would  be  a  "  blind  fool "  who  would  "  fail  to  recognize  that  the  blessings  of 
the  insurance  system  cannot  be  fully  described  even  by  the  use  of  unqualified 
laudation.'*6  The  advantages  of  the  collective  liability  system  of  compensation 
will  readily  appear  by  a  reference  to  the  disadvantages  of  the  individual  liability 
system. 

1.  The  collective  liability  systems  even  without  State  support,  afford  a  prac- 
tical guarantee  of  solvency  because  of  the  wide  incidence  of  the  liability,  the 
only  danger  being  that  of  having  the  classes  too  small. 

1  See  analysis   of  German  system,  post,  p.   97. 
"  See  F.  &  D.,  30. 

3  There  is,  however,  an  element  of  a  State  guarantee  in  the  German  system,  arising 
out  of  the  provision  for  the  taking  over  by  the  State  of  the  obligations  of  insolvent 
trade  associations. 

4  See  post,  p.  122. 

5  S.  &  E.,  22,  148,  149,  251,  282;  F.  &  D.,  139;  Rep.  Fed.  Com.  U.  S\,  104,  118,  279,  1425; 
Cd.  2458,  p.  41;  Rep.  Mich.  Com.,  33;  Rep.  Conf.  Com.,  21;  Rep.  Ohio  Com.,  Pt.  II, 
p.  312;  Cd.  2208,  p.  23;  24th  Rep.  Bureau  of  Statistics,  New  Jersey,  165;  4th  Special 
Rep.  U.  S.  Bur.  Lab.,  285,  et  seq. 

*  Friedensburg,  "Praxis  der  Deutschen  Arbeiterversicherung,  46,  see  post,  p.  145. 


92  CANADIAN  MANUFACTURERS'  ASSOCIATION:  Xo.  65 

2.  Under  a  collective  liability  system  large  and  small  employers  stand  oh 
an  equal  basis,  both  in  the  matter  of  rate  and  of  risk.  The  system  would  not 
be  unduly  onerous  on  small   employers  such   as  farmeis. 

3.  The  collective  system  has  shown  the  best  results  in  inducing  accident 
prevention.  The  classification  of  employers  in  industry-groups,  creates  a  strong 
incentive  to  co-operative  action  in  the  direction  of  prevention,  the  less  careful 
employers  being  compelled  or  induced  to  measure  up  to  the  standard  of  the  most 
careful  on  pain  of  paying  a  higher  rate  or  other  penalty.1 

4.  The  collective  system  is  simple,  direct  and  economical  in  its  operation. 
By  eliminating  the  element  of  contest  between  the  employee  on  the  one  hand, 
and  the  employer  and  the  insurance  company  on  the  other,  practically  the  whole 
of  the  waste  is  eliminated  and  the  expenses  of  administration  reduced  to  a 
minimum. 

5.  The  collective  system  affords  the  very  best  facilities  for  administration  of 
payments  by  the  week  or  by  the  month  and  discourage  lump  sum  payments. 

6.  The  collective  system  does  not  afford  the  same  incentive  for  discriminating 
against  older  or  practically  disabled  workmen.  No  rule  supporting  such  a  dis- 
crimination could  be  justified  in  the  face  of  public  sentiment.2 

7.  The  elimination  of  a  direct  contest  between  employer  and  employee  removes 
a  source  of  friction  and  tends  to  more  harmonious  relations. 

8.  The  collective  liability  system  gives  real  and  effective  recognition  to  the 
doctrine  of  professional  risk  by  placing  the  burden  of  compensation  literally  upon 
the  industry;  and  no  undue  amount  of  unjust  obligation  or  liability  is  placed 
upon  the  individual  employer. 

9.  The  only  systems  which  have  been  placed  upon  any  sound  basis,  and  which 
promise  any  degree  of  permanency  are  the  collective  or  State  systemss  and  expert 
opinion  strongly  favors  the  collective  principle  as  the  only  satisfactory  solution. 

10.  The  collective  liability  system  constitutes  the  purest  form  of  insurance, 
the  risk  being  spread  over  the  widest  possible  area  and  the  payments  of  premiums 
and  benefits  being  absolutely  direct  and  the  participants  being  as  consistent  as 
humanly  possible. 

11.  The  collective  liability  system  can  be  operated  on  a  current  cost  plan 
with  its  attendant  advantages — simplicity  and  economy  of  operation  and  tendency 
to  reduce  hazards. 

12.  As  the  employee's  resource  is  simply  against  a  fund  it  does  not  involve 
the  determination  of  any  serious  private  rights  or  liability,  and  elaborate  and 
expensive  legal  process  is  unnecessary. 

Siaie  Liability.  ' 

Under  a  state  liability  system  the  obligation  of  compensating  the  workmen 
for  injuries  is  assumed  by  the  State  itself,  and  the  cost  is  levied  upon  employers 
or  employers  and  workmen  jointly  by  the  exercise  of  the  taxing  power  of  the 
State.  The  workman  looks  for  his  compensation  directly  to  the  State,  and  this 
marks  the  essential  character  of  a  state  liability  system. 

2See  F.  &  D.,  138,  139. 

-'  Interim  Rep.  Ont.  Com.,  407. 


1912  WOEKMEN'S  COMPENSATION  COMMISSION.  93 

Attention  should  be  called  to  the  distinction  between  a  State  Liability  system 
and  a  State  insurance  system.  A  state  insurance  system  is  not  necessarily  a 
state  liability  system.  The  law  may,  as  it  does  for  instance  in  Sweden,  cast  upon 
the  individual  employer  the  liability  to  compensate,  the  state  at  the  same  time 
providing  an  insurance  institution  in  which  he  may  insure  himself  against  that 
liability.  Such  a  system  is  an  individual  liability  system.  The  employer  himself 
is  individually  Liable  tor  the  payment  of  the  compensation  whether  the  insurance 
is  compulsory  or  optional.  Again  the  law  may  throw  the  liability  primarily 
upon  the  employer,  and  provide  that  upon  payment  of  the  insurance  premium, 
but  not  sooner,  the  obligation  to  compensate  shall  be  assumed  by  the  state. 
Such  a  system  might  be  classed  as  a  state  liability  system;  but  the  purest  form 
of  state  liability  is  where  the  state  itself  assumes  the  whole  obligation  and 
undertakes  responsibility  of  providing  the  necessary  funds  by  compulsory  collec- 
tion of  the  insurance  premiums.  Such  a  system  is  exemplified  in  the  Act 
of  the  State  of  Washington  which  provides  for  the  payment  of  compensation 
out  of  a  fund  administered  by  a  State  Department  and  collected  by  imposing 
the  necessary  rates  upon  the  pay  roll  of  industries.  The  State  of  Ohio,  on  the 
other  hand,  is  a  State  liability  system  of  the  optional  type,  and  throws  upon  the 
employer  a  liability  of  which  even  the  payment  of  his  premiums  to  the  state 
department  does  not  wholly  relieve  him. 

In  some  jurisdictions  the  plan  has  been  adopted  of  leaving  it  optional  with 
the  employer  whether  he  will  insure  in  the  institution  provided  by  the  state  or 
insure  in  some  private  institution.  This  plan  also  involves  the  placing  of  the 
primary  liability  to  concentrate  upon  the  individual  employer,  though  the  pay- 
ment of  the  premium  may  transfer  the  obligation  to  the  institution,  state  or 
private,  undertaking  the  insurance,  and  relieve  the  employer  from  further  individual 
liability.1  The  State  system  thus  operates  in  competition  with  the  private 
systems,  with  the  natural  result  that  the  private  companies  in  many  cases  offer 
lower  premium  rates  than  the  State  system.  This  is  possible  only  in  two  ways, 
by  selecting  the  better  risks  and  leave  the  poorer  to  the  State  system,  or  by 
running  at  a  loss.  In  liability  insurance  it  is  much  easier  to  run  for  a  period  of 
years  at  an  undetected  loss  than  in  most  other  classes  of  insurance.  This  is  par- 
ticularly the  case  in  a  system  where  compensation  is  paid  periodically  and  spread 
over  a  length  of  time.  The  inevitable  result  of  allowing  private  companies  so  to 
carry  on  business  would  be  insolvency  with  the  loss  falling  upon  the  very  persons 
whom  a  compensation  system  is  designed  to  protect.  The  great  and  insuperable 
difficulty  of  leaving  compensation  insurance  of  whatever  type  in  private  hands  is 
that  it  involves  the  assumption  by  the  State  of  an  obligation  more  onerous  than 
that  of  establishing  a  State  insurance  system,  namely,  that  of  supervising  the 
private  insurance  institutions,  the  form  of  their  policies  and  the  adequacy  of  their 
reserves.  The  task  of  compelling  such  institutions  to  set  up  adequate  reserves 
present  much  greater  difficulty  than  the  direct  administration  of  the  insurance 
funds  by  the  State  itself.  The  difficulty  of  State  supervision  of  private  companies 
is  increased  by  the  lack  of  experience  in  this  class  of  insurance  and  the  lack  of  any 
scientific  basis  for  rates;2  under  a  plan  of  compulsory  assessment  upon  the 
current  cost  plan  experience  is  entirely  unnecessary  and  the  speculative  element  is 
entirely  eliminated. 

It  must  also  be  remembered  that  one  of  the  chief  advantages  of  a  State  or 
collective  liability  system  arises  out  of  its  size  and  the  breadth  of  the  basis  of 

1  E.g.,  Ohio,  Massachusetts. 

2  See  post,  p.  55. 


94  CANADIAN  MANUFACTUKERS'  ASSOCIATION:  No.  65 

insurance  thus  rendered  possible.  Where  this  basis  is  divided  with  a  number  of 
other  systems  and  organizations  are  multiplied  the  advantage  is  correspondingly 
minimized  and  in  addition  the  State  system  is  subjected  to  the  competition  of 
the  private  company  who  can  afford  to  take  larger  risks  of  failure.  In  the  State 
Df  Ohio  at  the  present  time  liability  insurance  companies  are  in  competition  with 
the  state  system,  carrying  risks  at  a  rate  in  many  cases  not  more  than  one-fifth 
that  charged  by  the  same  companies  in  other  S';ates  where  the  compensation  laws 
are  less  drastic,  but  where  there  is  no  compensation  from  the  state  system.  This 
naturally  prejudices  the  operation  of  the  state  department  and  very  probably  means 
for  the  liability  companies  a  loss  which  must  be  made  up  by  increased  rates  in  the 
other  states.  But  notwithstanding  the  difficulties  and  disadvantages  under  which 
the  state  insurance  systems  of  this  class  have  to  contend,  the  experience  has  been 
that  they  drive  the  private  schemes  out  of  business.1  This  is  the  result  which  may 
fairly  be  anticipated  for  such  systems  as  that  of  Massachusetts,  Michigan,  and  New 
York;  but  in  the  meantime  they  involve  a  condition  of  immense  confusion,  waste, 
and  general  dissatisfaction  for  the  community  in  general,  and  inevitable  financial 
loss  to  the  company  or  the  compensation  pensioners. 

The  advantages  of  a  collective  system  are  largely  if  not  wholly  attained  in  a 
state  system,  the  difference  between  the  two  forms  of  systems  being  theoretical 
rather  than  practical.2  If  a  state  system  were  to  be  administered  on  the  same  lines 
as  many  other  departments  of  state  activity  there  would  of  course  be  grave  danger 
of  abuses  by  reason  of  political  and  other  undue  influences.  It  is  uniformly  re- 
cognized that  the  administration  of  a  compensation  should  be  as  far  as  possible 
removed  from  such  influences.  Accordingly  the  approved  form  of  administration 
is  by  commission,  independent,  as  far  as  possible,  of  direct  political  influenca 
Some  jurisdictions  have  gone  so  far  as  to  provide  tFat  the  members  of  the  commission 
must  not  all  be  of  the  same  political  party.3  In  so  far  as  the  state  system  can  be 
made  thus  independent  it  becomes  practically  equivalent  to  a  collective  system.  In 
fact,  it  has  been  said  of  the  Washington  system  that  it  is  not  so  much  a  state  liability 
system  as  a  system  of  collective  liability  administered  by  the  state.4 

The  absolute  guarantee  of  the  state  is  unnecessary  because  the  state  has  always 
the  means  of  collecting  the  necessary  funds  by  assessing  employers. 


Analysis  of  Some  Systems. 

While  the  different  systems  of  the  world  can  and  should  be  classified  under  the 
heads  above  suggested  there  is  infinite  variety  in  the  details  and  form  of  their 
operation.  Below  is  given  an  outline  of  the  chief  feature  of  a  number  of  systems 
which  may  be  regarded  as  types. 

The  English  System. 

The  English  workmen's  compensation  Act  is  an  individual  liability  act;  every 
workman  within  the  scope  of  the  act  is  entitled  to  be  compensated  by  his  employer 
for  personal  injury,  for  accident  "arising  out  of  and  in  the  course  of  the  employ- 
ment," provided  the  injury  is  not  attributable  to  "  serious  and  wilful  mis- 
conduct," and  provided  the  injury  disables  the  workman  for  a  period  of  at  least 

1  See  F.  &  D.,  38;  Rep.  Atlantic  City  Conf.,  296. 

2  See  Rep.  Atlantic  City  Conf..  300. 

3  E.g..  Ohio. 
'See  post.  p.  122. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  95 

one  week  from  earning  full  wages  at  the  work  at  which  lie  was  engaged.1  The  work- 
man looks  directly  to  his  employer  for  his  compensation.  Provision  is  made  for 
employers  relieving  themselves  of  their  individual  liability  by  organizing  insurance 
or  benefit  "  schemes,"  but  the  conditions  surrounding  the  organization  and  approval 
of  these  schemes  are  so  onerous  that  practically  no  advantage  has  been  taken  of  the 
provision;  instead  many  employers  insure  themselves  against  their  liability  by 
"  employers'  liability  insurance,"  the  insurance  companies  engaging  for  a  specific 
rate  based  upon  the  pay  roll,  to  indemnify  the  employer  against  liability  in  respect 
of  accidents  that  occur,  and  to  assume  the  defence  of  any  proceedings  that  may  be 
brought  against  the  employer  to  enforce  compensation. 

All  occupations  are  covered  by  the  Act,  but  an  exception  is  made  of  (a)  persons 
not  employed  in  manual  labor  whose  remuneration  exceeds  £250  per  year;    (&) 
persons  whose  employment  is  of  a  casual  nature;  (c)     members  of  the  employers' 
family  dwelling  in  his  house. 

In  case  of  injury  resulting  in  death  the  compensation  under  the  English  Act 
consists  of  reasonable  expenses  for  medical  attendance  and  burial  to  a  maximum 
of  £10  ($48.67)  and  a  lump  sum  payment  equal  to  £150  ($729.98)  or  three  years' 
earnings,  whichever  is  larger,  up  to  a  maximum  of  £300  (1,459.95)  apportioned 
amongst  the  dependents  of  the  deceased.  Where  the  injuries  result  in  disablement 
the  compensation  is  a  weekly  payment  on  the  basis  of  one  half  the  impairment  of 
earning  capacity  but  not  exceeding  £1  ($4.86)  per  week. 

By  agreement  between  the  parties  and  with  the  consent  of  the  court  weekly 
payments  may  be  commuted  for  a  lump  sum  and  this  appears  to  be  the  practice  in 
the  majority  of  cases ;  in  case  of  dispute  over  a  claim  for  compensation  the  workman 
has  recourse  to  proceedings  in  the  county  court  or  to  arbitration,  and  from  the 
decision  of  these  bodies  and  with  their  consent  an  appeal  lies  in  questions  of  law  to 
the  Court  of  Appeal. 

Many  of  the  features  of  the  English  Act  were  introduced  by  way  of  ill-digested 
amendments  passed  in  the  teeth  of  the  recommendations  of  investigating  committees 
of  Parliament.  The  whole  system  represents  a  series  of  compromises  in  attempting 
to  operate  a  principle  which  is  now  generally  recognized  as  inadequate.  The  follow- 
ing passage  from  the  report  of  the  Departmental  Committee  of  1904  speaks  for 
itself : 

"  But  even  if  legislation  in  the  direction  indicated  in  the .  last  paragraph  is 
adopted  the  difficulty  and  danger  arising  from  the  insolvency  of  the  employer  will 
not  be  completely  met.  For  there  is  no  obligation  upon  him  other  than  that  of 
enlightened  self-interest  compelling  him  to  insure,  and,  as  has  been  pointed  out, 
there  are  many  employers,  and  there  are  likely  to  be  more,  if  the  Act  is  extended, 
who  through  ignorance  or  recklessness  or  inability  will  not  insure,  or  if  they  insure 
at  first  will  not  keep  up  their  insurance;  this  difficulty,  and  indeed,  many  other 
difficulties  to  which  the  present  system  gives  rise,  could  only  be  solved  by  the  sub- 
stituting for  the  personal  liability  of  the  individual  employer  the  security  of  a  fund 
the  solvency  of  which  was  for  all  practical  purposes  assured.  The  problems  how 
such  a  fund  is  to  be  provided,  how  employers  are  to  be  induced  or  compelled  to 
insure  their  workmen,  and  how  the  workmen  are  to  be  given  direct  recourse  to  such 
a  fund  may  have  to  be  faced  in  the  future,  but  in  strictness,  the  attempt  at  their 
solution  lies  beyond  the  scope  of  this  reference.  We  have  considered  it  to  be  our 
duty  to  accept  the  principle  of  the  Act  of  1897,  imperfect  as  we  believe  it  to  be.  As 
has  been  often  pointed  out  the  scheme  of  that  Act  was  to  cast  upon  the  employer 
the  duty  of  providing  the  compensation,  leaving  him  to  protect  himself  if  not 
wealthy  enough  to  bear  his  own  burden  by  the  ordinary  methods  of  insurance.     We 


96  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

t 

have  recommended  changes  in  the  law  which  we  think  may  advantageously  be  made 
in  carrying  out  this  principle.  At  the  same  time  we  have  indicated  from  time  to 
time  the  inherent  difficulties  involved  in  its  application.  It  is  not  improbable  that 
in  the  future  the  state  will  have  to  take  upon  itself  more  extensive  functions  in 
relation  to  accident  insurance.  We  have  indicated  in  the  preceding  paragraphs 
that  there  is  a  strong  case  for  legislation  so  as  to  give  greater  security  for  the  sol- 
vency of  commercial  insurance  companies.  Many  witnesses  have  suggested  that 
some  system  of  national  insurance  should  be  established  which  should  relieve  em- 
ployers from  all  personal  liability  except  that  of  providing  the  necessary  funds. 
Any  such  proposal  would  require  and  will  doubtless  hereafter  receive  the  fullest  con- 
sideration from  the  Legislature.  It  may  be  that  the  state  should  establish  or 
regulate  a  system  of  insurance  which  would  provide  an  opportunity  for  every  em- 
ployer and  for  every  workman  to  obtain  complete  security-  It  may  be  that  a  state 
policy  might  protect  the  employer  from  all  personal  liability  except  the  payment  of 
the  premium.  It  may  even  be  that  ultimately  some  form  of  compulsion  might  be 
adopted  requiring  all  employers  to  insure  their  workmen  in  some  association  under 
state  regulations.  It  may  be  that  under  such  a  system  larger  benefits  than  those 
given  by  the  present  act  might  be  provided  for,  but  in  that  case  it  would  seem  to 
follow  that  some  contribution,  proportionate  to  the  increase  of  benefits,  should  be 
made  by  the  workmen  to  the  insurance  fund.  Tbese  and  similar  questions  are 
probably  in  prospect,  but  it  would  be  premature  and  beyond  our  commission  to 
discuss  them.  We  can  only  indicate  that,  beneficial  as  we  believe  the  legislation  of 
1897  to  have  been  on  the  whole,  we  do  not  think  it  can  be  regarded  otherwise  +han 
as  a  step  in  the  direction  of  a  more  comprehensive  system."1 

The  German  System. 

The  accident  compensation  system  of  Germany  is  a  collective  liability  system, 
liability  to  compensate  being  imposed,  not  upon  employers  individually,  but  upon 
associations  of  employers,  formed  under  state  compulsion  and  supervision.  The 
accident  compensation  system  is  a  part  of  a  larger  insurance  system,  embracing 
sickness  insurance,  old  age  insurance  and  unemployed  insurance,  as  well  as  accident 
insurance. 

For  the  first  thirteen  weeks  after  the  occurrence  of  an  accident  compensation 
is  paid  out  of  the  sickness  insurance  fund,  which  is  raised  by  joint  contribution  in 
equal  portions  from  employers  and_  workmen.  After  the  first  thirteen  weeks  com- 
pensation is  paid  out  of  the  accident  insurance  funds  which  are  raised  by  contribu- 
tion from  employers  only. 

Employers  are  grouped  according  to  industries  into  mutual  trade  associations, 
(Berufsgenossenschaften)  which  are  practically  mutual  insurance  companies;  the 
insurance  funds  are  raised  by  assessments  upon  the  members  of  these  associations 
according  to  the  pay-roll.  The  actual  payment  of  compensation  is  made  through 
the  Post  Office  and  the  money  for  compensation  payments  is  advanced  by  the  Post 
Office  on  the  order  of  the  Directors  of  the  Trades  Associations.  These  advances  are 
liquidated  at  the  end  of  the  year  by  the  trade  associations  and  the  amount  of  the 
advances,  together  with  the  cost  of  administration  and  the  amount  required  to  be 
set  aside  for  the  reserve  fund,  is  assessed  upon  the  members  of  the  trade  associations, 
so  that  not  the  capital  value  of  the  pensions  but  only  the  actual  payments  out  dur- 
ing the  previous  year  are  collected. 

, 

1  Cd.  2208,  p.  123. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  97 

• 

The  associations  have,  in  addition  to  the  power  of  fixing  rates  and  making 
assessments,  the  power  to  make  and  enforce  preventive  regulations  and  to  employ 
expert  inspectors  and  specialists  in  accident  prevention  and  to  provide  medical  and 
surgical  aid.  Each  trade  association  elects  its  own  board  of  directors  to  manage 
its  insurance  fund,  but  is  subject  to  the  general  supervision  by  the  Imperial  Insur- 
ance Department. 

Injured  employees  or  their  dependents  apply  for  their  compensation  directly 
to  the  directors  of  the  trade  association.  In  case  of  dispute  as  to  the  right  to,  or 
the  amount  of,  compensation  an  appeal  lies  to  a  court  of  arbitration  with  a  final 
appeal  to  the  Senate  of  the  Imperial  Insurance  Office. 

The  German  system  covers  all  occupations,  including  shipping,  agriculture 
and  domestic  service.  It  covers  employees  in  receipt  of  a  yearly  wage  of  3,000 
marks,  ($714)  or  less;  but  provision  is  made  for  the  voluntary  insurance  of  em- 
ployees in  receipt  of  a  higher  wage  and  also  for  small  employers  who  desire  to 
insure  themselves. 

Compensation  is  granted  for  all  injuries  occurring  in  the  course  of  employment, 
unless  the  accident  has  been  intentionally  brought  on  by  the  injured  person  or  his 
dependants,  or  unless  it  is  the  result  of  an  act  which  has  been  judicially  pronounced 
a  crime  or  offence. 

The  benefits  under  the  German  system  are:  (A)  In  case  of  disability  from  the 
fourteenth  week  after  the  accident  (1)  free  medical  and  surgical  treatment  as  well 
as  necessary  appliances  such  as  crutches,  artificial  limbs,  etc;  (2)  an  allowance 
during  disability  of  66  2-3  per  cent,  of  the  impairment  of  earning  capacity;  (3)  if 
the  workman  is  not  only  disabled  from  working  but  helpless  and  requiring  attend- 
ance an  allowance  of  100  per  cent,  of  the  former  annual  earnings. 

(B.)  In  case  of  death  (1)  a  funeral  benefit  equal  to  one-fifteenth  of  the  annual 
earnings,  but  not  less  than  50  marks  ($11.90)  ;  (2)  an  allowance  to  dependants  of 
not  more  than  60  per  cent  of  the  annual  earnings  as  follows : 

(a)  To  the  widow  until  death  or  re-marriage,  or  to  the  dependent  widower  or 
to  each  child  up  to  the  completion  of  the  fifteenth  year,  20  per  cent,  of 
annual  earnings ;  on  re-marriage  the  widow  receives  a  settlement  equivalent 
to  three  years'  allowance. 

(b)  Where  the  60  per  cent,  is  not  exhausted  by  the  widow  and  children,  parents 
or  grandparents  wholly  or  partially  dependent  are  entitled  to  an  allow- 
ance not  exceeding  20  per  cent. 

(c)  And  where  the  60  per  cent,  is  not  wholly  exhausted  by  widow,  children, 
parents,  grandparents,  grandchildren,  wholly  or  partially  dependent,  are 
entitled  to  an  allowance  not  exceeding  20  per  cent,  each  to  the  completion 
of  the  fifteenth  year. 

The  Washington  System. 

The  system  of  the  State  of  Washington  is  a  state  insurance  system.  The 
obligation  to  compensate  workmen  for  injuries  is  assumed  by  the  state  itself, 
through  an  Industrial  Insurance  Board.  Compensation  on  a  scale  laid  down  in  the 
Act  is  paid  out  of  a  fund  created  by  contributions  levied  upon  employers  as  a  tax. 
Contributions  to  the  fund  are  levied  in  accordance  with  a  schedule  fixed  by  the  Act 
in  which  different  classes  of  occupations  are  graded  according  to  hazard  and  the 
rates  fixed  as  a  percentage  on  the  pay  roll. 

The  Act  applies  only  to  "  extra-hazardous "  employments,  this  limitation 
being  considered  necessary  owing  to  the  constitutional  restrictions  upon  the  State 
7   L. 


98  CANADIAN"  MANUFACTURERS'  ASSOCIATION:  No.  65 

power  of  legislation,  but  provision  is  made  for  voluntary  insurance  by  the  employers 
not  included  in  the  compulsory  operation  of  the  Act.  Within  the  class  of  industries 
enumerated  the  Act  applies  to  all  employers,  large  and  small. 

The  compensation  schedule  provides  for  (a)  Expenses  of  burial  not  exceeding 
$75;  (b)  a  payment  of  $20  per  month  for  life  to  the  widow  or  invalid  widower  with 
an  addition  of  $5  per  month  for  each  child  under  the  age  of  16  years,  the  total  not 
to  exceed  $35  per  month.  The  estimated  capital  amount  of  this  payment  is  $1,000, 
which  sum  is  set  apart  out  of  the  general  fund  in  each  individual  case  as  a  special 
fund  to  meet  the  payments,  any  surplus  or  deficit  being  adjusted  with  the  general 
fund.  The  capital  amount  of  $4,000  may.  in  some  cases  be  paid  out  in  a  lump  sum; 
(c)  Permanent  partial  disability  is  compensated  by  a  lump  sum,  payment  cor- 
responding to  the  extent  of  the  injury  but  not  exceeding  $1,500.  Instead  of  a 
waiting  period  the  Washington  Act  provides  that  no  compensation  shall  be  payable 
unless  the  loss  of  earning  power  exceeds  5  per  cent,  and  there  is  no  provision  for 
temporary  partial  disability.  Claims  for  compensation  are  adjusted  by  the  state 
insurance  department,  subject  to  appeal  to  the  Superior  Court  of  the  county. 

The  State  Department  consists  of  three  commissioners,  appointed  by  the 
Governor,  with  a  staff  of  auditors,  assistants,  etc.  The  Department  lias  power  to 
employ-  one  or  more  physicians  in  each  county  for  the  purpose  of  efficient  medical 
examinations. 

Safety  regulations  are  enforced  by  the  imposition  of  penalties  payable  to  the 
insurance  fund. 

The  common  law  remedies  of  the  workmen  are  entirely  merged  in  the  remedy 
under  the  Act;  but  where  an  employer  refuses  or  neglects  to  pay  his  insurance 
assessments  the  workman  may  bring  an  action  against  the  employer,  the  latter  being 
in  such  cases  deprived  of  the  defence  of  common  employment  and  assumption  of 
risk. 

The  Nonvegian  System. 

The  Norwegian  system  is  a  state  insurance  system.  Employees  are  insured  in 
a  state  institution  and  apply  to  it  for  their  compensation. 

The  insurance  scheme  covers  practically  every  hazardous  industrial  and  com- 
mercial enterprise  except  farming  and  fishing.  The  various  industries  are  class- 
ified into  groups  according  to  the  risk  of  the  employment  and  employers  pay 
premium  into  the  State  Insurance  Institution  commensurate  with  the  risk  and 
based  upon  the  number  of  the  employees  and  size  of  the  payroll. 

For  the  first  four  weeks  of  incapacity,  unless  the  injured  employee  has  made 
special  provision  for  himself,  the  employer  is  individually  liable  to  make  provision. 
The  State  Insurance  Institution  compensates  the  employees  for  the  injuries  result- 
ing in  total  disability  for  a  period  of  not  more  than  four  weeks,  by  weekly  payments 
equal  to  60  per  cent,  of  the  basic  wage  but  in  no  case  less  than  150  crowns  ($40.20) 
per  year.  If  the  annual  earnings  of  a  workman  are  more  than  1,200  crowns  a  year 
the  compensation  payments  are  based  on  that  amount.  Tn  the  case  of  disability 
more  or  less  permanent  i lie  weekly  payments  may  be  commuted  under  certain  cir- 
cumstances for  a  lump  sum  representing  not  more  than  five  years'  payments. 

Where  the  injury  to  the  workman  results  in  death  the  State  Insurance  Institu- 
tion pays  the  cost  of  burial  to  the  amount  of  50  crowns  ($13.40)  and  allows  the 
following  pensions  to  the  survivors,  (a)  To  a  widow  an  amount  equivalent  to  29 
per  cent,  of  the  injured  person's  wages;  (h)  to  each  child  an  allowance  of  not  more 
than  15  per  cent,  of  the  workman's  wages  up  to  the  completion  of  the  15th  year,  the 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  99 

total  paid  to  the  widow  and  children  in  no  case  to  exceed  50  per  cent;  (c)  where  the 
50  per  cent,  is  not  exhausted  by  widow  and  children,  to  dependent  ancestors  an 
allowance  of  not  more  than  20  per  cent.  each. 

The  State  Insurance  Institution  is  controlled  by  a  Board  of  three  members — a 
Managing  Director  and  two  Associate  Directors  appointed  by  the  King.  The 
latter  retire  one  at  a  time,  every  three  years,  after  six  years'  service,  but  retiring 
members  may  be  re-appointed. 

Cases  in  dispute  are  settled  by  the  Directors  of  the  State  Insurance  Institution. 
An  appeal  lies  from  the  Institution  to  a  special  commission  consisting  of  seven 
members,  three  appointed  by  the  King,  and  two  each  representing  employers  and 
employees  appointed  by  Parliament,  (Storthing).  This  commission  constitutes  a 
final  court  for  all  matters  of  assessment  but  a  further  appeal  may  be  made  to  the 
regular  courts  for  questions  of  law. 

The  pension  payments  are  made  largely  through  the  agency  of  the  Post  Office. 

The  adjustments  of  claims  as  well  as  the  investigation  of  industrial  establish- 
ments and  a  large  share  of  the  general  administration  of  the  Act  is  in  the  hands  of 
"  Inspectors  "  appointed  by  the  authority  of  the  Communes  but  directly  respons- 
ible to  the  State  Insurance  Institution. 

The  rates  of  insurance  are  based  upon  the  capitalized  value  of  the  pensions 
accruing  by  the  accidents  of  each  year  and  not,  as  under  the  German  system,  upon 
the  actual  payments  made  during  the  year.  A  reserve  fund  is  therefore  set  up 
which  is  intended  to  provide  for  the  liquidation  of  all  claims  for  injuries  accruing 
in  the  past. 

The  Ohio  System. 

The  Ohio  system  is  an  individual  liability  system  with  optional  state  insurance. 
Employers  are  liable  to  an  action  at  law  without  the  protection  of  the  defence  of 
contributory  negligence,  common  employment,  and  assumed  risk.  Upon  payment 
of  an  appropriate  insurance  premium  this  liability  is  assumed  by  the  state  and  the 
employer  is  freed  from  liability  save  for  the  wilful  acts  of  himself  or  his  agents,  or 
the  breach  of  any  statutory  regulations,  in  which  the  employee  has  the  option, 
instead  of  applying  to  the  Board  for  his  compensation  to  bring  an  action  at  law. 
The  State  Insurance  Department  is  controlled  by  a  Board  known  as  the  "  State 
Liability  Board  of  Awards  "  consisting  of  three  members,  not  more  than  two  of 
whom  may  belong  to  the  same  political  party.  The  members  are  appointed  by  the 
Governor  for  six  years,  one  member  retiring  every  two  years. 

The  Act  extends  to  all  establishments  in  which  five  or  more  workmen  or 
operators  are  regularly  employed  and  where  the  employer  has  elected  to  come  under 
the  scheme.  Such  establishments  are  insured  by  the  Board  at  rates  estimated  by 
the  Department  as  being  adequate  to  carry  the  risk. 

Of  the  premiums  paid  to  the  department  the  employer  is  authorized  to  deduct 
ten  per  cent,  from  the  wages  of  the  workmen. 

Employees  coming  under  the  Act  are  entitled  to  compensation  for  all  injuries 
sustained  in  the  course  of  their  employment  provided  the  injury  has  not  been  self- 
inflicted. 

The  schedule  of  compensation  is  as  follows : 
(a)   Medical  and  hospital  expenses  not  exceeding  $200. 
(h)  In  case  of  death  funeral  expenses  not  exceeding  $150. 
(c)   A  compensation  allowance  as  follows: 

(A)    in  case  of  death.     1.  To  wholly  dependent  persons   an  allowance 


100  CANADIAN  MANUFACTUKEKS'  ASSOCIATION:  No.  65 

(after  the  first  week)  of  66  2-3  per  cent,  of  the  average  weekly  wages,  for 
a  period  of  six  years  after  the  death,  the  whole  to  he  not  more  than  $3,400 
and  not  less  than  $1,500.  2.  To  partly  dependent  persons  an  allowance 
(after  the  first  week)  of  66  2-3  per  cent,  of  the  average  weekly  wages  for 
all  or  such  portion  of  six  years  as  the  Board  may  determine,  the  whole  not 
to  be  more  than  $3,100  and  not  less  than  $1,500. 

(B)  In  case  of  temporary  or  partial  disability  an  allowance  to  the 
employee  (after  the  first  week)  of  66  2-3  per  cent,  of  the  impairment  of 
earning  capacity,  not  more  than  $12  per  week  and  not  less  than  $5  per 
week  for  six  years  from  the  date  of  the  injury. 

(C)  In  ease  of  permanent  total  disability  an  allowance  to  the  em- 
ployee (after  the  first  week)  of  66  2-3  per  cent,  of  the  average  weekly 
wages,  not  more  than  $12  per  week,  and  not  less  than  $5  per  week  until 
death. 

The  Board  has  power  to  commute  periodical  payments  into  one  or  more  lump 
sums. 

The  Board  has  full  jurisdiction  to  adjust  and  re-adjust  all  claims  for  compen- 
sation, and  its  decision  is  final  except  where  compensation  is  entirely  denied  on  the 
ground  that  the  injury  was  self-inflicted  or  did  not  arise  in  the  course  of  the  employ- 
ment or  the  like,  in  which  case  the  applicant  has  the  right  to  bring  an  action  against 
the  Board  itself. 

An  employee  who  exercises  his  option  to  institute  proceedings  in  the  court  as 
above,  thereby  waives  his  right  to  compensation  from  the  Board;  and  conversely  by 
■applying  to  the  Board  a  workman  waives  his  right  to  institute  proceedings. 

The  Massachusetts  System. 

The  Workmen's  Compensation  Act  of  the  State  of  Massachusetts  establishes 
a  collective  liability  system  under  the  supervision  of  a  department  of  the  State. 
The  Act  abrogates  the  Common  Law  defences,  contributory  negligence,  common 
employment  and  assumption  of  risk.  If  the  employer  elects  to  insure  in  the  Mas- 
sachusetts Employers'  Insurance  Association  which  is  managed  by  representatives 
of  the  employers,  the  injured  workman  has  to  apply  directly  to  the  Association  for 
compensation  and  the  individual  employer  is  under  no  liability. 

All  employees  of  employers  who  have  elected  to  come  under  the  jurisdiction  of 

ibis  Act  are  entitled  to  the  benefits  of  this  Act  unless  they  have  given  due  notice  to 

the  contrary  and  provided  that  the  industrial  accident  has  (1)  arisen  out  of  and  in 

the  course  of  employment,  (2)  leads  to  incapacity  for  a  period  of  less  than  2  weeks. 

■(3)  was  not  due  to  the  serious  and  wilful  misconduct  of  the  workman. 

The  Act  furnishes  the  following  benefits : 

■ 

(A)  In  Case  of  Death. 

(1)  Where  the  injured  workman  leaves  no  dependants  payment  for  last  sick- 
ness and  burial  not  to  exceed  $200. 

(2)  Relatives  wholly  dependent,  a  weekly  payment  equal  to  one-half  the  work- 
man's average,  but  not  less  than  $1  and  not  more  than  $10  per  week,  for  a  period 
of  300  weeks  from  the  date  of  the  injury. 

(3)  To  relatives  partly  dependent  a  weekly  payment  proportionate  to  the 
degree  of  dependency  with  due  regard  to  (lie  pension  allowed  to  relatives  wholly 
dependent. 


1912  WORKMEN'S  COMPENSATION  COM.M  ISS'OX.  101 


(B)  In  Case  of  Incapacity. 

(1)  If  total  incapacity  results  from  the  injury  the  workman  snail  be  allowed 
a  pension  equal  to  one-half  his  wage,  to  he  not  less  than  $1  and  not  more  than  $10 
for  a  period  of  500  weeks,  the  total  amount  of  such  pension  not  to  exceed  $3,000. 

(2)  Where  partial  incapacity  results  to  the  workman  from  his  injury  he  shall 
be  allowed  a  pension  equal  to  one  half  his  impaired  earning  power,  such  pension  not 
to  be  more  than  $10  per  week  for  a  period  of  300  weeks,  and  total  amount  of  such 
pension  not  to  exceed  $3,000. 

(3)  In  case  of  specific  injuries  such  as  loss  of  feet,  hands,  eye,  etc.,  pension 
for  stipulated  periods  according  to  schedule  are  to  be  allowed. 

Weekly  payments  may  be  commuted  after  six  months  into  a  lump  sum  by  the 
agreement  of  the  parties  but  subject  to  the  approval  of  the  Industrial  Accident 
Board. 

The  Industrial  Accident  Board  consists  of  three  members,  appointed  by  the 
Governor  of  the  State  for  a  period  of  six  years,  one  member  of  the  Board  to  retire 
every  second  year.  It  is  the  duty  of  this  Board  to  supervise  the  work  of  the  em- 
ployers' Insurance  Associations.  Where  the  injured  workman  and  the  Industrial 
Insurance  Association  fail  to  arrive  at  a  settlement  as  to  the  amount  of  the  benefit 
to  be  allowed,  the  Industrial  Accident  Board  calls  for  the  formation  of  a  committee 
of  arbitration.  This  committee  consists  of  one  member  of  the  Board  and  a  repre- 
sentative of  each  party  interested.  An  appeal  lies  from  the  arbitration  committee 
to  the  Industrial  Accident  Board  and  a  further  appeal  to  the  Supreme  Judicial 
Court,  the  latter  on  questions  of  law  only. 

If  an  employee  is  injured  by  reason  of  the  serious  and  wilful  misconduct  of  the 
employer,  or  persons  regularly  entrusted  with  exercising  the  power  of  superintend- 
ence, the  amount  of  compensation  is  doubled.  In  such  case  the  employer  who  has 
subscribed  to  the  employee's  Insurance  Association  repays  the  Association  the  extra 
compensation  paid  to  the  employee. 


Employers'  Liability  Insurance. 

Where  the  obligation  to  compensate  workmen  for  injuries  is  thrown  directly 
upon  individual  employers  it  is  customary,  and  it  is  in  fact  assumed  to  be  neces- 
sary, for  the  employer  to  insure  himself  against  his  liability  in  an  insurance  com- 
pany or  institution.  Eeference  has  been  made  to  a  theory  which  has  been  advanced 
that  employers  should  not  be  allowed  thus  to  insure  their  liability  lest  the  incentive 
to  prevention  of  accidents  be  minimized.1  This  theory  is  of  course  entirely  contrary 
to  the  whole  genius  of  workmen's  compensation  as  generally  understood.  If  applied 
in  practice  it  would  not  only  result  in  depriving  workmen  in  a  large  percentage 
of  cases  of  all  compensation,  but  would  have  a  tendency  opposite  to  that -ascribed, 
for  the  greatest  preventive  effort  can  be  induced  only  by  the  invocation  of  co- 
operation and  specially  directed  effort.  In  any  practical  conception  of  an  individual 
liability  scheme  insurance  is  a  necessary  adjunct. 

Employers'  liability  insurance  first  arose  in  England  after  the  Employers* 
Liability  Act  of  1880.  While  there  were  isolated  instances  of  such  insurance  before 
that  time  there  had  not  been  in  England  or  elsewhere  any  general  practice  amongst 
employers  of  insuring  themselves  against  possible  liability  in  respect  of  personal 
injuries  to  their  employees.  Upon  the  passing  of  the  Act  the  well-known  "Lloyds" 
at  once  began  to  do  a  considerable  business  in  liability  insurance  and  other  com- 

1  See  ante,  p.  63. 


102  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


panies  sprang  up  throughout  Great  Britain.  The  Act  of  1897  brought  with  it  a 
great  extension  of  this  class  of  insurance.  Reports  of  the  Board  of  Trade  show 
that  there  are  now  fifty-six  British  companies  engaged  in  employers'  liability 
insurance.  A  corresponding  development  has  taken  place  in  the  United  States 
and  in  Canada.  The  Report  of  the  Superintendent  of  Insurance  for  the  Dominion 
shows  that  there  are  twenty  companies  engaged  in  employers'  liability  insurance 
business  in  this  country.  Eleven  of  these  are  foreign  companies  and  of  the 
remainder  some  are  subsidiary  to  foreign  companies.1  During  the  year  1911 
there  were  in  force  in  Canada  employers'  liability  policies  aggregating  $86,641,045, 
of  which  $28,687,400  was  held  by  Canadian  companies.  None  of  the  Canadian 
companies  are  engaged  exclusively  in  employers'  liability  insurance  but  carry 
on  other  branches  of  insurance  as  well. 

Employers'  liability  insurance  has  been  denned  as  "the  undertaking  of  liability 
under  policies  insuring  employers  against  liability  to  pay  compensation  or  damages 
to  workmen  in  their  employment."2  Such  insurance  is  in  its  nature  entirely 
different  from  accident  insurance  though  the  two  classes  of  insurance  are  fre- 
quently carried  on  by  the  same  company,  and  in  fact  sometimes  combined  in  the 
same  policy.  The  essential  difference  between  the  two  types  of  insurance  is  so 
important  in  considering  workmen's  compensation  systems  and  is  so  commonly 
misunderstood  or  ignored  that  it  should  be  the  subject  of  careful  observation. 
Accident  insurance  would  insure  the  workman  against  loss  resulting  from  accident. 
Employers'  liability  insurance  insures  the  employer  against  loss  from  being  com- 
pelled to  pay  compensation  or  damages  to  his  workman.  Accident  insurance  is 
for  the  protection  of  the  workmen;  employers'  liability  insurance  is  for  the  pro- 
tection of  the  employer.  Where  a  workman  is  insured  against  accident  his  recourse, 
in  case  of  loss,  is  directly  against  the  insurance  company.  Where  an  employer 
has  insured  in  an  employers'  liability  company  the  workman's  recourse  in  case 
of  injury  remains  directly  against  the  employer.  The  liability  policy  affords  the 
workman  no  protection,  but  on  the  contrary  enlists  on  the  side  of  the  employer  the 
experience  and  superior  facilities  of  the  insurance  company  in  contesting  claims. 
For  the  practice  is  for  the  insurance  company  to  assume  and  conduct  the  defence 
of  any  action  that  may  be  brought  by  the  workman  to  enforce  his  rights  against  the 
employer.  The  employer  on  the  other  hand  is  not  in  a  position  to  deal  unrestric- 
tedly with  his  employees  in  settling  claims  which  may  appear  to  him  deserving, 
lest  the  case  should  not  commend  itself  to  the  insurance  company  as  one  involving 
a  legal  liability  on  the  part  of  the  employer.  So  far  as  the  workman  is  concerned, 
therefore,  workmen's  compensation  is  either  negative  in  its  operation  or  positively 
detrimental. 

In  other  and  less  direct  ways  liability  insurance  is  also  positively  detrimental 
to  the  employee  and  this  fact  is  generally  recognized.  Employers  are  often  pre- 
vented by  the  terms  of  their  policies  from  engaging  older  or  partially  incapacitated 
men  for  the  reason  that  they  increase  the  hazard.3  Again,  insurance  companies 
are  accused  of  exerting  undue  pressure  in  making  settlements.  The  representative 
of  the  company  as  a  matter  of  business  siezes  the  psychological  moment  when  the 
injured  man  or  his  dependents  are  most  in  need  to  offer  a  settlement  for  ready 
cash,  which  is  almost  as  certain  to  be  disadvantageous  to  the  beneficiaries  as  it 
is  advantageous  to  the  company.4 

'See  Rep.  Supt  Ins.  1911,  p.  57. 

MVFcGilliveray,  Insurance  Law,  28;  F.  &  D.  8. 

"See  Conf.  of  Com.,  64;  P.  &  D.,  16;  Rep.  Atlantic  City  Conf.,  38. 

4  See  S.  &  E.,  231;  Cd.  2208,  39,  40;  F.  &  D.,  16. 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  103 

It  follows  from  the  nature  of  the  insurance  that  the  risk  is  subject  to  infinite 
variations.  In  life  insurance  there  is  always  a  firm  basis  in  the  mortality  tables 
which  though  subject  to  some  fluctuation,  do  not  substantially  vary  in  different 
localities  or  at  different  times.  Employers'  liability  on  the  other  hand  is  subject 
to  a  variety  of  factors  and  conditions  many  of  which  are  not  susceptible  of  any- 
thing like  accurate  calculation.  First  and  foremost  is  the  question  of  the  opera- 
tion of  the  laws  under  which  the  liability  is  imposed;  whether  and  to  what  extent 
the  Liability  rests  upon  fault  on  the  part  of  the  employer;  whether  and  to  what 
extent  it  is  affected  by  fault  on  the  part  of  the  employee;  what  defences  are 
available  to  the  employer  in  an  action  by  the  workman;  whether  the  remedy  of 
the  workman  is  a  single  one  or  whether  he  has  a  choice  of  two  or  more  remedies; 
to  what  extent  the  method  of  adjustment  involves  expense  in  litigation  or  other- 
wise;  whether  the  method  of  adjudication  permits  of  punitive  or  exemplary  damages. 
Another  factor  is  of  course  the  hazard  or  probability  of  the  occurence  of  an  injury. 
This  depends  primarily  upon  the  nature  of  the  occupation  and  is  subject  also  to 
other  influences  such  as  the  degree  of  care  exercised  in  guarding  machinery,  etc.; 
the  degree  of  strictness  in  enforcing  rules  of  safety,  the  speed  of  operation,  the 
nationality,  age,  sex  and  general  character  of  employees,  as  well  as  a  variety  of 
circumstances  constituting  what  is  generally  known  as  the  "moral  hazard."  In 
the  third  place  the  character  of  the  risk  is  dependent  upon  the  schedule  of  pecuniary 
benefits  which  the  workman  is  entitled  to  receive,  or  the  customary  scale  of  damages 
allowed  by  court  or  jury.  Of  the  three  large  classes  of  factors  mentioned  this 
might  appear  to  be  the  most  readily  calculable;  but  where  the  compensation  system 
involves  periodical  payments  extending  over  a  considerable  period,  further  con- 
siderations are  introduced  such  as  the  probability  of  the  duration  of  life  of  incapaci- 
tated persons,  the  probability  of  the  workman's  being  married,  the  probable  number 
of  children  or  other  dependants,  the  probable  duration  of  widowhood,  with  a 
variety  of  other  factors  which  may  influence  the  duration  of  the  compensation 
period.  Absence  of  reliable  statistics  or  experience  in  any  one  factor  involves  an 
element  of  speculation  beyond  the  legitimate  risk  which  it  is  the  province  of  insur- 
ance to  equalize.  But  in  liability  insurance  many  of  the  prime  factors  have  not 
been,  nor  in  fact  do  they  perhaps  admit  of  being,  subjected  to  scientific  treatment. 
The  ephemeral  nature  of  the  laws  covering  employers'  liability,  the  wide  extent  of 
the  territory  covered  by  most  liability  insurance  companies,  and  the  diffusion  of  the 
business  in  a  given  territory  amongst  a  large  number  of  insurance  institutions  has 
thus  far  stood  in  the  way  of  any  attempt  at  uniformity  such  as  has  been  attained 
through  the  underwriters'  associations  in  other  lines  of  insurance.  The  speculative 
and  unscientific  character  of  the  employers'  liability  insurance  rates  is  generally 
recognized  x  and  is  acknowledged  by  the  insurance  companies  themselves.2  It  is 
understood  indeed  that  a  movement  has  just  been  begun  with  the  object  of  forming 
an  association  of  employers'  liability  companies  for  the  purpose  of  dealing  with 
rates,3  but  the  plans  of  this  movement  as  outlined  in  the  insurance  journals  reveal 
not  only  how  absolutely  inadequate  and  unscientific  has  been  the  treatment  of  rates 
up  to  the  present,  but  also  how  difficult  it  'is  to  place  them  upon  a  more  satisfactory 
basis. 

The  primary  effect  of  unscientific  rating  is  to  penalize  the  less  hazardous  in- 
dustry and  the  less  careful  employer,  as  against  the  more  hazardous  industry  and 


*See  S.  &  E.,  227,  242;  Rep.  Wis.  Com.,  40;  Rep.  1111.  Com.,  169. 

2  See  24th  Rep.  U.S.  Bur.  Lab.,  1544,  1548. 

3  See  "  The  Iron  Age,"  2nd  May,  1912,  p.  1,094. 


104  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

the  less  careful  employer.  This  weakness  of  the  liability  insurance  system  has  led 
many  progressive  employers  to  abandon  it  altogether  and  carry  their  own  risk.  With 
the  larger  employers  this  is,  of  course,  quite  practicable,  but  the  smaller  employer 
must  either  submit  to  the  unjust  rate  or  carry  an  undue  risk. 

One  difficulty  that  stands  in  the  way  not  only  of  establishing  a  scientific  basis 
of  rates,  but  in  fact  of  any  plan  of  uniform  action,  is  the  variation  amongst  different 
insurance  companies  in  their  conception  of  the  function  of  the  insurance  which  they 
undertake.  Some  companies,  construing  their  relations  to  the  employer  in  a  literal 
sense,  make  it  a  policy  to  pay  only  in  case  where  the  employer  is  strictly  liable  in 
law,  and  of  defending  doubtful  cases  as  far  as  possible.  Other  companies  adopt  a 
broader  view  of  their  functions  and  recognize  to  some  degree  the  natural  desire  of 
the  employer  on  humanitarian  grounds  to  see  the  workman  compensated  in  doubt- 
ful cases.  The  latter  conception  involves  of  course  an  element  of  accident  insurance, 
and  as  already  noted,  accident  insurance,  more  or  less  limited,  is  frequently  com- 
bined with  policies  of  employers'  liability  insurance.  The  practice  of  companies, 
however,  varies  not  only  with  the  form  of  policy  but  with  the  general  attitude 
towards  employers'  liability  insurance.  In  some  insurance  companies  the  question 
of  the  merits  of  a  claim  for  compensation  is  left  almost  wholly  to  the  employer,  the 
company  promptly  settling  such  claims  as  are  recommended  by  the  employer.  In 
other  companies  every  claim  is  carefully  considered  with  the  view  to  the  possibility 
of  a  defence.  Again,  the  attitude  of  employers  towards  insurance  companies  varies 
greatly.  Some  employers  expect  the  insurance  companies  to  stand  behind  them  in 
every  case,  small  or  large;  other  employers  carry  their  insurance  only  for  the  purpose 
of  protecting  themselves  against  very  serious  and  large  claims,  and  pay  the  smaller 
claims  without  having  recourse  to  the  insurance  company.  These  variations  in 
attitude  on  the  part  of  the  company  and  of  the  employer  are  necessarily  reflected 
in  the  insurance  rates,  and  constitute  another  factor  standing  in  the  way  of  any- 
thing like  uniformity  of  hazard  or  rate,  not  only  as  amongst  different  companies  but 
also  as  between  different  insurers  in  the  same  company. 

In  this  connection  it  may  also  be  observed  that  the  rate  of  insurance  usually 
varies  with  the  amount  of  the  policy.  Rates  are  generally  fixed  with  reference  to 
policies  for  a  limited  sum,  usually  $5,000,  which  is  fixed  as  the  limit  of  the  com- 
pany's liability  for  any  one  accident.  For  insurance  beyond  this  amount  a  higher 
rate  is  exacted. 

Viewed  as  an  agency  for  the  administration  of  workmen's  compensation  the 
defects  of  employers'  liability  insurance  become  still  more  apparent.  From  this 
standpoint  the  efficiency  of  the  insurance  must  be  largely  regarded  as  a  matter  of 
economy,  in  transferring  the  money  paid  by  the  employer  in  premiums  with  a 
minimum  of  loss  to  its  proper  destination,  the  injured  workman  or  his  dependents, 
in  this  aspect  employers'  liability  insurance  appears  in  no  better  light  than  in  the 
matter  of  rating.  Figures  gathered  by  the  Commission  of  the  State  of  New  York 
show  that  of  $23,523,585  gross  premiums  collected  by  ten  firms  during  the  years 
1906,  1907  and  1908  only  $8,559,795  was  paid  out  in  claims  to  injured  workmen,1 
It  is  commonly  estimated  in  the  United  States  that  of  every  dollar  paid  out  by 
the  employer  in  liability  insurance  premiums  only  from  20  to  30  per  cent,  even- 
tually reach  the  pocket  of  the  injured  workman.2 

The  Report  of  the  Superintendent  of  Insurance  for  lite  Dominion  for  the  year 
1911,  shows  that  the  twenty  insurance  companies  engaged  in  the  employers'  liability 

'Sec  Rep.  Ohio  Com.,  Pt.  T,  p.  38. 

2  See  S.  &  E.,  242;  F.  &  D.,  16;  Rep.  Fed.  Com.  U.S.,  840;  Rep.  Wash.  Com.,  5;  Rep. 
111.  Com.,  11. 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  105 


business  in  Canada  collected  a  total  of  $2,103,275  in  premiums,  of  which  .$1,0:5:5,1)96 
was  written  off  as  "loss"  and  $927,774  was  paid  out  in  claims.  In  other 
words,  of  the  money  paid  in  by  way  of  insurance  premiums,  only  44  per  cent. 
was  actually  paid  out  in  compensation,  and  only  4!)  per  cent,  of  loss  is  charge- 
able according  to  the  calculations  of  the  company  against  the  year's  business.  Of 
this  another  considerable  portion  will  go  towards  expenses  and  fees  of  the  plaintiff's 
solicitor,  leaving  the  ratio  of  actual  benefit  to  the  workman  about  the  same  as  in  the 
United  States. 

Of  the  expenses  a  very  large  percentage,  between  20  and  25  per  cent.,  repre- 
sents the  commissions  of  agents.  Being  a  yearly  business,  liability  insurance  passes 
easily  from  one  company  to  another  and  each  change  involves  a  commission  to  the 
agent  for  "  new  business."  An  effort  on  the  part  of  the  United  States  companies 
has  resulted  in  a  scaling  down  of  this  item  of  expense  to  173/2  Per  cent.,  but  further 
reduction  will  be  very  difficult  owing  to  the  competitive  nature  of  the  business  and 
the  instability  of  policies  due  to  constant  changes  in  the  laws.  Another  large  item 
of  expense  is,  of  course,  that  of  litigation.  The  balance  is  made  up  of  general  office 
expenses,  salaries  of  officials,  etc.,  though  an  increasing  amount  is  being  spent  upon 
inspection  of  risks  with  a  view  to  reducing  the  hazard.  Owing  to  the  diffusion  of 
the  business  amongst  a  large  number  of  companies,  many  of  them  small,  and  the 
consequent  duplication  of  work,  the  ratio  of  expense  is  of  course  much  larger  than 
it  would  be  if  the  business  were  in  the  hands  of  a  smaller  number  of  companies. 

Notwithstanding  the  large  percentage  of  premium  money  applied  by  companies 
in  expenses  the  business  of  employers'  liability  insurance,  as  a  business,  has  not 
been  successful.  Both  the  English  and  the  American  companies  have  since  the 
inception  of  this  type  of  insurance  been  running  at  an  aggregate  loss.-  The  returns 
of  the  British  Board  of  Trade  for  1910  shows  that  the  thirty-four  tariff  companies 
in  that  country  incurred  an  aggregate  loss  on  the  year's  business  of  4.77  per  cent, 
of  the  premiums,  while  twenty-two  non-tariff  companies  netted  a  loss  of  34.28  per 
cent. 

With  the  introduction  of  systems  of  periodical  compensation  new  problems  are 
being  introduced  into  the  business  of  emplo3rers'  liability  insurance.  It  becomes 
necessary,  under  these  systems  to  calculate  the  present  worth  of  the  periodical  pay- 
ments, the  probable  duration  of  the  life  of  the  recipient  or  the  period  of  incapacity. 
In  England  the  practice  has  grown  up  of  commuting  the  periodical  payments  by 
turning  them  into  an  annuity,  and  sometimes  by  purchasing  a  government  annuity. 
The  natural  tendency  is  of  course  to  liquidate  the  loss  as  soon  as  possible  and  write 
it  off.  "Where  the  commutation  assumes  the  form  of  a  government  annuity  it 
doubtless  affords  some  advantage  in  the  way  of  assuring  solvency.  Whe*§g  payment 
of  the  annuity  is  assumed  by  the  company  itself  the  question  of  reserves  at  once 
arises.  In  view  of  the  uncertainty  as  to  the  duration  of  periodical  payments  con- 
sequent upon  lack  of  experience  and  statistics,  there  is  room  for  considerable  differ- 
ence of  opinion  as  to  the  necessary  amount  of  reserve  and  the  inevitable  danger  of 
inadequacy  is  of  course  increased  with  the  keenness  of  competition  for  business. 
There  is  grave  reason  to  fear  that  the  position  of  many  of  the  English  companies 
leaves  much  to  he  desired  on  the  score  of  ability  to  meet  their  future  obligations.8 
A  movement  is  now  on  foot  to  bring  these  companies  under  closer  government 
supervision. 

But  where  the  periodical  payments  are  converted  into  a  government  annuity 
1 

1  Abstract  of  Statements  of  Insurance  Companies  of  Canada  for  the  year  1911,  pp. 
57,  58. 

2  See  P.  &  D.,  23. 
8  See  P.  &  D.,  23. 


106  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

further  difficulties  arise.  A  workman  supposed  to  have  been  permanently  incap- 
acitated may  partially  or  wholly  recover  his  earning  power,  in  which  case  his  allow- 
ance is  supposed  to  cease.  The  government  annuity,  however,  would  run  on,  unless, 
indeed  a  form  of  annuity  were  devised  which  should  be  subject  to  the  contingencies 
of  physical  capacity,  which  would  be  the  administrative  side  of  the  government 
accident  insurance  system.  A  corresponding  difficulty  would  arise  where  the  injury 
to  a  workman  was  after  settlement  of  the  annuity  found  to  be  more  serious  than 
supposed  at  the  time  of  the  settlement. 

If  any  further  argument  is  needed  to  show  the  difficulties  of  a  system  of  liability 
insurance,  it  is  furnished  by  a  consideration  of  the  highly  anomalous  and  complex 
situations  that  may  arise,  for  instance,  in  the  case  of  a  workman  who  has  been 
totally  or  partially  incapacitated  for  twenty  years.     His  employer  may  be  insolvent 
or  dead.     The  insurance  company  may  be  insolvent.     The  employee's  recourse  is  of 
course  against  the  employer.     If  the  employer  is  insolvent  the  employee  cannot  re- 
cover against  him.       The  employer  not  having  suffered  any  loss  cannot  recover 
against  the  company.     If  the  employer  is  solvent  and  alive  the  company  may  be 
defunct  and  on  the  other  hand  if  the  company  is  in  a  position  to  carry  out  its  obli- 
gations, the  employer  may  not  be  alive  or  in  a  position  to  enforce  them.       The 
workman's  claim  is  no  stronger  than  the  weakest  link  in  the  chain  of  liability  and 
solvency,  and  the  attempt  to  strengthen  the  position  of  the  workman  by  a  series  of 
preferences  and  subrogations,  merely  adds  to  the  complexity  and  the  possibilities 
for  litigation.     In  fact  it  cannot  be  too  emphatically  asserted  that  an  employers' 
liability  insurance  system,  unless  under  government  control  so  rigid  as  to  amount 
practically  to  government  insurance,  is  entirely  incompatible  with  a  compensation 
system  of  periodical  payments.     From  the  employer's  standpoint  the  danger  of  tills 
condition  of  the  liability  insurance  business  is  that  his  insurance  may  fail  him  just 
when  he  needs  it  most.     A  period  of  financial  depression  impairing  the  value  of  the 
insurance  company's  securities  and  curtailing  its  premium  income  may  cause  it  to 
go  into  liquidation,  leaving  upon  the  employer  not  only  his  risk  but  under  a  per- 
iodical payment  system  the  payment  of  compensation  for  which  he  has  already  paid 
the  company. 

Nor  are  the  defects  of  employers'  liability  counterbalanced  by  any  considerable 
accompanying  advantages.  Apart  from  amplitude  of  premium  rates  and  success 
in  contesting  claims  for  compensation,  the  only  factor  which  can  have  any  consider- 
able effect  upon  the  profits  of  the  insurance  company  and  which  affords  any  con- 
siderable field  for  its  activities  is  that  of  accident  prevention.  In  this  branch  the 
success  of  liability  insurance  companies  has  been  no  more  marked,  and  their  treat- 
ment no  more  scientific  than  in  other  departments.1  While  some  effort  has  been 
made  by  inspection  to  select  and  grade  risks  these  efforts  have  been  thus  far  per- 
functory and  desultory.  It  is  in  fact  very  difficult  for  the  average  insurance 
company  to  work  out  any  system  of  efficient  inspection.  In  Canada,  for  instance, 
the  insurance  in  each  branch  of  industry  is  scattered  amongst  a  score  of  companies. 
Many  of  the  largest  and  best  members  of  each  class  do  not  insure  at  all,  and  amongst 
the  smaller  employers  non-insurance  is  the  rule.  Under  these  circumstances  it  is 
impossible  for  an  insurance  company  to  give  to  even  the  main  branches  of  industries 
that  specialized  inspection  which  is  necessary  to  secure  adequate  results.  If  the 
insurance  were  divided  amongst  the  different  companies  on  special  lines  according 
to  the  nature  of  the  industry,  there  would  be  some  possibility  of  specialized  and 
scientific  preventive  work,  but  under  existing  conditions  or  under  any  system  of 
voluntary  insurance  this  is  impracticable. 
'  See  Rep.  111.  Com.,  169. 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  107 

The  Actuarial  Phase. 

One  of  the  most  important  of  the  many  phases  of  the  complex  subject  of  work- 
men's compensation  is  the  question  of  the  proper  actuarial  basis  for  computing 
premium  rates.  This  phase  in  itself  is  not  so  complex  as  it  at  first  sight  appears. 
It  resolves  itself  into  the  question  which  of  two  plans  shall  be  adopted;  but  the 
effects  and  consequences  of  the  respective  plans  render  the  question  one  of  the  most 
direct  concern  in  the  establishment  of  a  system. 

In  a  system  where  a  lump  sum  is  paid  at  the  time  of  the  accident  to  liquidate 
the  entire  claim  in  respect  of  an  injury,  the  actuarial  problem  presents  a  different 
aspect  from  that  which  appears  where  the  payments  assume  a  periodical  form  spread 
over  a  number  of  years.  In  the  former  case  the  actuarial  problem  is  merely  a 
matter  of  striking  such  rates  as  shall  bring  a  total  premium  income  sufficient  to 
meet  the  year's  claims,  or  the  claims  in  respect  of  injuries  occurring  during  the 
year.  An  inadequate  rate  would  involve  nothing  worse  than  a  loss  on  the  year's 
business.  The  failure  of  an  insurance  company  would  not  mean  anything  more 
than  the  loss  of  the  insurance  of  one  year. 

Where,  however,  the  compensation  is  payable  in  instalments  spread  over  a 
period  of  years,  terminable  upon  a  variety  of  contingencies  and  subject  to  increase 
or  decreases,  different,  or  rather  additional,  considerations  arise.  It  becomes 
necessary  then  to  reckon  with  such  factors  as  probable  duration  of  life  or  of  widow- 
hood, probable  number  of  dependants  and  probable  extent  and  duration  of  disabil- 
ities. An  error  in  the  calculation  of  a  rate  under  such  a  system  is  much  more 
serious  in  its  consequences  than  in  a  system  where  payments  are  regularly  liquidated 
at  the  time  of  the  accident.  Inadequacy  of  rate  under  such  a  system  involves 
insufficiency  of  reserves  to  meet  future  compensation  payments;  and  the  failure  of 
an  insurance  company  would>mean  not  only  the  loss  of  a  year's  insurance  but  the 
loss  of  a  series  of  pensions  reaching  forward  a  generation. 

Where  compensation  insurance  assumes  the  form  of  an  insurance,  in  a  private 
company,  of  the  liability  of  the  individual  empolyer,  there  can  be  no  question  as  to 
the  necessity  of  maintaining  adequate  reserves  to  meet  future  payments.  Any 
attempt  to  make  up  deficiencies  in  the  reserves  out  of  future  premiums  would  bring 
the  inevitable  fate  of  similar  practices  in  life  insurance, — and  the  more  readily  as 
there  is  not  the  same  difficulty  in  getting  new  employer's  liability  insurance  as  there 
is  in  getting  new  life  insurance.  The  result  would  be  bankruptcy  for  the  company, 
but  the  more  serious  result  would  be  the  failure  of  the  payments  of  compensation. 
But  an  entirely  different  set  of  circumstances  arises  where  the  compensation  takes 
the  form  of  an  assumption  by  the  state,  or  by  a  collective  body  exhaustive  of  its 
olass;  of  the  obligation  to  compensate  directly  the  workman  and  not  merely  to 
indemnify  the  emplo}rer.  In  such  a  system  there  is  in  the  first  place  no  shifting  or 
fluctuation  of  the  class  of  insurers,  except  where  an  occasional  business  change 
occurs  by  reason  of  death,  bankruptcy,  etc.  The  class  remains  comparatively  fixed. 
There  is  no  danger  of  members  leaving  and  joining  another  scheme,  and  consequently 
no  danger  of  rates  rising  above  normal  even  where  no  reserves  are  set  up.  It  is 
possible,  therefore,  under  such  a  system  to  merely  assess  the  proper  amount  to  meet 
each  year's  current  payments  without  setting  up  any  reserve  to  provide  for  future 
payments.  If  no  attempt  is  made  to  set  up  a  reserve  fund  there  can  never  be  any 
rate  above  the  normal  rate  based  upon  the  actual  current  requirement.  Under  such 
a  plan,  which  may  be  called  the  "  current  cost "  plan,  the  initial  rate  would  be  com- 
paratively low,  the  first  year's  rate  being  based  on  the  sum  required  to  pay  the  first 
year's  pensions.     The  annual  rate  would  increase  from  year  to  year  under  normal 


108  CANADIAN  MANUFACTUKEES'  ASSOCIATION:  ^        No.  65 

conditions,  for  a  period  of  thirty  or  forty  years,  that  is  until  such  times  as  the 
number  of  persons  dropping  off  the  pension  list  by  death  or  otherwise  equalled  the 
number  coming  on  by  reason  of  accident.1 

There  are,  therefore,  available  two  plans  of  rating,  one,  which  may  be  called  the 
"  capitalized  "  plan,  of  charging  against  the  year's  premiums  a  capital  sum  sufficient 
to  provide  for  future  payments  of  compensation  for  all  accidents  of  the  year,  and 
the  other,  which  may  be  called  the  "  current  cost  "  plan  of  merely  levying  each  year 
the  amount  necessary  to  pay  the  year's  pensions.  Under  the  capitalized  plan  the 
rates  are  fixed  upon  the  assumption  that  when  an  injury  occurs  an  estimate  should 
be  made  of  the  amount  necessary  to  provide  for  all  payments,  immediate  and  future. 
The  present  worth,  so  to  speak,  of  the  compensation  payments  is  found  and  this 
amount  is  collected  and  set  aside  in  the  year  in  which  the  injury  occurs,  or  in  the 
case  of  a  private  company,  is  written  off  as  a  loss  against  the  year's  premiums.  Under 
the  current  cost  plan  no  such  estimate  is  made  and  no  amount  is  set  aside  or 
written  off.  Each  year  there  is  collected  only  enough  to  meet  the  payments  due 
that  year. 

For  further  illustration  of  the  two  methods  reference  may  be  had  to  the 
Washington  Act  under  which,  in  case  of  death,  an  allowance  of  $20  per  month  is 
given  to  the  widow  or  invalid  widower.  The  compensation  payments  for  one  year 
would  amount  to  $240.  It  is  estimated  that  to  supply  the  necessary  fund  to  pay 
$240  per  year  for  life  in  the  average  case  $4,000  would  have  to  be  set  aside.  The 
question  as  between  the  current  cost  plan  and  the  capitalized  plan  is  whether  there 
should  be  collected  each  year  the  $240  to  be  paid  out  that  year,  or  whether  the 
whole  amount  of  $4,000  should  be  collected  for  the  year  in  which  the  accident  took 
place. 

It  is  obvious  that  no  such  actuarial  qustion  would  arise  where  the  compensation 
was  paid  in  a  lump  sum.  In  this  country  up  to  recent  times  and  indeed  in  most 
countries  the  rule  has  been  either  a  lump  sum  compensation  or  permission  to  com- 
mute the  periodical  payments  for  a  lump  sum.  Accordingly  insurance  companies 
in  this  country  and  in  other  countries  such  as  England  have  not  been  called  upon 
to  deal  with  any  other  actuarial  plan  than  one  involving  immediate  capital  sums. 
The  recent  Act  of  the  Province  of  Quebec,  however,  with  its  non-commutable  "rents" 
has  introduced  a  new  phase  in  compensation  insurance  in  this  country.  There  can 
be  no  doubt  that  in  the  compensation  systems  of  the  future  periodical  payments  will 
be  the  rule  and  lump  sum  payments  will  be  abandoned.2  This  introduces  an 
entirely  new  feature  in  insurance.  It  is  necessary  in  fixing  insurance  rates  on  the 
capitalized  plan  to  deal  not  only  with  questions  of  the  hazard  of  different  occupations 
and  industries  but  such  questions  as  the  probable  length  of  life,  the  probable  age  of 
workmen,  the  probability  of  being  married,  the  probable  number  and  age  of  chil- 
dren, and  the  probability  of  re-marriage  of  widows.  Upon  these  will  depend  the 
amount  and  the  period  of  the  pension  allowances,  and  the  amount  of  reserve  neces- 
sary to  set  up.3 

Where  compensation  insurance  is  carried  by  private  companies  with  a  shifting 
clientele  it  is  essential  that  the  insurance  rates  shall  be  strictly  adequate  to  provide 
a  sufficient  reserve  for  carrying  the  pensions,  otherwise  when  the  inevitable  rise  in 
rates  was  brought  on  the  insurers  would  abandon  their  policies  and  the  pension 
obligations  would  ruin  the  company.  The  tendency  of  the  rise  in  rates  would  also 
be  to  attract  the  poorer  class  of  .business  not  wanted  by  better  companies,  which 

1  See  Rep.  Fed.  Com.  U.S.,  103,  276;   P.  &  D. 
*  See  ante,  p.  68. 
s  See  ante,  p.  104. 


1912  WOEKMEN'S  COMPENSATION   COMMISSION.  L09 

i 
with  its  higher  lass  ratio  would  still  further  handicap  the  company.3  The  current 
cost  plan  of  insurance  is,  therefore,  possible  only  in  a  state  insurance  system  or  in  a 
collective  system  with  permanent  classes. 

The  most  obvious  advantage  of  the  current  cost  plan  is  the  saving  in  immediate 
cost  in  insurance  premiums.  The  immediate  imposition  of  a  capitalized  rate  would 
involve  a  very  serious  shock  to  many  industries.  It  has  been  pointed  out  that  the 
rate  would  run  from  2  to  10  per  cent,  on  the  pay-roll  according  to  the  scale  of 
benefits  conferred  by  the  Act.  Under  the  current  cost  plan  the  rates  would  in  most 
industries  start  at  about  one-fifth  the  capitalized- rate.2  Reference  has  been  made 
to  the  want  of  adequate  stati>ii<s  and  experience  as  a  basis  of  rates.3  In  view  of 
this  it  would  be  necessary,  in  order  to  insure  adequacy  in  the  reserve,  to  capitalize 
at  an  outside  estimate,  with  the  possibility,  of  course,  that  this  would  he  much  above 
actual  cost,  but  with  the  possibility  also  that  it  might  still  be  inadequate,  in  which 
case  the  whole  intention  would  fail.  Experience  of  other  jurisdictions  has  shown 
the  practical  difficulty  of  assessing  an  adequate  capitalization  rate.  In  Norway 
the  state  insurance  institution  found  itself  after  some  years  of  operation  face  to 
face  with  a  deficit  of  approximately  $100,000  in  its  reserves.  This  amount  was 
made  up  by  the  government  out  of  the  general  funds.4  It  is  easilv  -ecu  that  in 
a  larger  system  such  as  that  of  Germany  or  Austria  the  deficit  would  have  been 
much  more  serious.  In  fact  the  Austrian  system  which  thoretically  operates  on 
the  capitalized  plan  has  been  facing  for  some  years  a  deficiency  which  in  spite  of 
constant  advances  in  the  rates  is  still  increasing.5 

There  is  a  temptation  to  urge  at  first  blush,  against  the  current  cost  plan  of 
compensation  insurance,  the  objection  against  assessment  life  insurance,  but  a 
moment's  reflection  will  show  that  the  two  classes  of  insurance  are  not  on  the 
same  footing.  In  the  first  place  in  life  insurance  both  the  taking  out  of  the  policy 
and  the  continuation  of  the  payments  are  voluntary.  It  is  open  to  an  insurer  after 
he  has  made  a  number  of  payments  to  drop  his  policy,  and  subject  to  the  difficulty 
of  increased  age,  to  take  out  a  new  policy  in  another  company.  No  corresponding 
course  is  open  under  a  system  of  compulsory  compensation  insurance. 

The  only  serious  objection  which  can  be  urged  against  a  system  of  current  cost 
assessment  is  that  it  involves  the  throwing  on  future  industry  of  some  of  the  burdens 
accruing  in  the  present.  This  objection  is  entirely  outweighted  by  the  considera- 
tion that  the  rate  will  not,  when  it  reaches  its  maximum,  be  any  larger  than  the 
capitalized  rate,  but  as  experience  in  Germany  shows  will  be  much  lower,  and  the 
further  consideration  that  the  immense  sums  of  money  which  it  would  be  necessary 
to  lay  aside  as  a  reserve  fund  are  left  in  active  circulation  in  the  employer's  business. 
But  the  theoretical  objection  itself  vanishes  when  it  is  remembered  that  employers 
and  the  community  generally  are  now  bearing,  and  will  continue  for  a  generation 
to  bear  the  burden  of  the  accidents  of  the  past.  Those  persons  who  have  suffered 
injuries  in  past  industrial  accidents  are  of  course  being  provided  for.  and  will  con- 
tinue to  be  provided  for  by  various  means  including  poor  relief  and  charity.  As 
this  burden  gradually  decreases  it  is  just  and  equitable  that  the  burden  of  the  new 
compensation  system  should  gradually  increase. 

One  important  phase  of  the  capitalized  plan  of  insurance,  which  is  apt  to  escape 
notice  on  a  casual  consideration  of  the  subject,  is  the  aggregate  size  of  the  reserves 

1  See  Den.  Atlantic  City  Conf.,  296. 

2  See  Rep.  Fed.  Com.  U.S.,  102. 

3  See  arte,  p.  104. 

4  See  24th  Rep.  U.S.  Bur.  Lab.,  pp.  2.032,  2,041;   see  also  Bulletin  90,  U.S.  Bur.  Lab., 
pp.  798,  799. 

"See  F.  &  D.,  130,  131;   Bulletin  90,  U.S.  Bur.  Lab.,  753. 


110  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


necessary  in  a  capitalized  system  of  state  insurance.  In  any  large  system,  these 
reserves  would  reach  immense  proportions.  In  the  State  of  Washington  the  reserve 
investments  for  the  first  six  months  of  operation  were  over  $111,000.  It  is  easily 
seen  even  in  that  State  with  the  natural  increase  in  business  and  the  extension  of 
the  system  a  very  large  fund  will  be  built  up. 

In  Germany,  where  the  current  cost  plan  was  adopted  from  the  beginning  there 
is  regularly  assessed  upon  employers  a  margin  of  from  9  to  10  per  cent,  above  the 
actual  cost  of  the  insurance,  and  this  amount  is  being  set  aside  as  a  reserve  fund  to 
provide  for  such  contingencies  as  the  entire  wiping  out  of  the  industry  or  its  in- 
ability to  meet  its  payments  in  a  period  of  financial  depression.  In  the  accident 
funds  this  reserve  fund  had  in  1910,  reached  over  $76,000,000.  Strenuous  objec- 
tions are  constantly  being  made  on  the  part  of  employers  against  the  piling  up  of 
this  reserve.  "  On  this  subject  the  sentiment  among  employers  is  almost  universal. 
They  claim  that  even  with  its  acknowledged  faults  this  feature  of  their  system  is 
much  superior  to  the  methods  used  elsewhere  in  attempting  to  cover  such  deferred 
payments.  They  say  that  neither  twenty-five  years  ago,  when  Germany  started,  nor 
now,  are  there  statistics  available  upon  which  to  base,  with  reasonable  certainty, 
the  future  cost  of  accident  compensation.  They  feel  that  it  would  be  a  most  serious 
mistake  to  tie  up  the  billions  of  dollars  required  to  cover  any  reasonable  estimate  of 
deferred  payments,  and  think  that  the  withdrawal  of  such  sums  would  do  much 
more  harm  to  German  industrial  development,  which  now  needs  all  the  available 
cash  in  the  country,  than  any  harm  that  can  possibly  come  to  future  industries 
which  necessarily  will  have  to  start  under  a  heavier  financial  burden  due  to  con- 
stantly increasing  insurance  premiums.  They  feel  that  such  heavier  burden  is  more 
than  outweighed  by  the  strenuous  pioneer  work  which  had  to  be  done  by  the  German 
industries  at  the  beginning,  and  which  must  be  done  even  now."1  It  is  urged,  also, 
in  Germany  that  the  maintenance  of  the  reserve  funds  tends  to  extravagance  and 
constant  agitation.  The  existence  of  the  funds  is  an  invitation  for  greater  and 
greater  demands  on  the  part  of  workmen,  and  a  tendency  on  the  part  of  the  judges 
administering  the  law  to  allow  claims  not  strictly  justified.  It  may  be  argued  that 
the  money  thus  laid  up  in  reserves  is  not  lost,  that  it  finds  its  way  back  into  channels 
of  commerce.  This  is  in  part  true.  But  it  is  also  true  that  funds  so  set  aside  have 
lost  most  of  their  fluidity  and  consequently  much  of  their  commercial  efficacy. 

The  quotation  above  indicates  also  that  even  in  Germany  after  many  years  of 
painstaking  gathering  of  statistics,  it  is  not  possible  to  calculate  accurately  the 
capitalized  cost  of  an  injury.  In  a  system  just  beginning  such  a  calculation  would 
be  many  times  more  difficult,  and  it  has  already  been  urged  as  one  of  the  difficulties 
of  employers'  liability  insurance,  that  in  the  absence  of  statistics  and  experience  it 
is  impracticable  to  make  even  an  approximate  guess  as  to  the  capitalized  value  of 
periodical  compensation  allowances.  One  of  the  great  advantages  of  the  current 
cost  actuarial  plan  is  that  the  necessity  for  actuarial  experience  is  entirely  obviated. 

The  direct  economic  advantages  of  the  current  cost  plan  of  compensation  insur- 
ance are  outweighed  in  importance,  however,  by  the  more  indirect  effort  of  the  plan 
in  inducing  preventive  activity.  The  operation  of  the  plan  to  this  end  as  illustrated 
in  the  Herman  system  is  discussed  in  a  most  interesting  passage  of  the  statement 
made  before  the  Federal  Commission  by  Mr.  Miles  M.  Dawson.2  It  is  there  shown 
that  the  rapid  rise  in  the  insurance  rate  for  the  first  few  years  is  a  marked  factor 
in  concentrating  the  attention  of  the  employers  upon  the  importance  of  accident 

1  S.  &  E.,  41. 

*See  Rep.  Fed.  Com.  U.S.,  102,  106,  and  see  Interim  Rep.  Ont.  Com.,  403. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  Ill 

prevention.     The  tables  on  the  following  page  will  show  the  course  of  the  premium 
rates  in  some  industries  in  'Germany.1 

It  should  be  observed  that  these  rates  unaffected  by  preventive  activity,  would 
under  actuarial  calculation  have  continued  to  advance  for  a  period  varying  in  differ- 
ent industries  from  twenty  to  fifty  years.  And  this  advance  would  be  accelerated 
by  the  tendency  to  increase  the  speed  of  production  and  other  modern  factors  tending 
to  increase  hazard. 

But  the  tables  show  that  the  rise  in  rates  was  very  early  interrupted  and  this 
was  undoubtedly  by  reason  of  accident  prevention.  Thus  in  the  agricultural  im- 
plement machinery  class,  the  rate,  starting  at  0.32  per  cent.,  reached  in  seventeen 
years  2.07  per  cent.,  and  has  since  fluctuated  very  little,  though  in  1908  it  reached 
2.11  per  cent. 

In  the  carpentry  class  the  maximum  of  2.80  per  cent,  was  reached  in  eight 
years  and  since  that  time  the  rate  has  been  materially  lower.  Railways,  starting  at 
.39  per  cent.,  in  seven  years  reached  1.80  per  cent,  and  thereafter  declined  for  some 
years,  the  present  rate  being  about  1.85  per  cent.  A  similar  course  is  shown  in  most 
of  the  other  classes.  It  is  not  difficult  to  see  how  the  rapid  increase  in  rates  during 
the  earlier  period  of  the  system  would  call  increasing  attention  to  the  necessity  of 
prevention,  and  the  great  success  of  the  German  system  of  accident  prevention  is 
largely  ascribed  to  this  factor.  If  there  were  nothing  to  commend  the  current  cost 
plan  of  insurance  except  its  influence  in  the  direction  of  accident  prevention,  there 
would  be  in  this  aspect  alone  a  sufficient  warrant  for  its  adoption  and  for  the  re- 
jection of  any  plan  of  compensation  incompatible  with  it. 

"Taken  from  brief  of  M.  M.  Dawson,  Rep.  Fed.  Com.  U.S.,  277.     See  also  Bulletin  90, 
U.S.  Bur.  Lab.,  749. 


11-i 


CANADIAN  MANUFACTURERS'  ASSOCIATION 


No.  65 


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1912  WORKMEN'S  COMPENSATION   COMMISSION.  113 

RECOMMENDATIONS. 
Nature  of  System. 

The  one  outstanding  and  inevitable  result  of  the  analysis  of  principles  and 
comparison  of  systems  in  the  foregoing  pages,  is  the  negative  conclusion  that  no 
system  of  individual  employers'  Liability,  however  broadly  that  Liability  may  be 
extended,  will  afford  a  solution,  permanently  or  even  temporarily  satisfactory,  for 
the  problem  of  workmen's  compensation.  Only  two  other  alternatives  are  open — 
either  a  collective  liability  or  a  state  liability  system.  It  has  been  pointed  out  that 
these  systems  are  not  essentially  dissimilar,  the  differences  being  theoretical  rather 
than  practical.  It  is  submitted  that  the  system  most  likely  to  be  satisfactory,  under 
all  the  circumstances,  for  the  Province  of  Ontario  is  a  collective  system  under  state 
administration  and  control.  It  is  proposed  that  the  funds  for  compensation  should 
be  collected  by  grouping  the  various  industries  and  occupations  of  the  province,  and 
assessing  upon  each  group  its  proper  insurance  premium.  As  an  illustration,  the 
wood-working  industries  of  the  province  should  be  placed  in  one  group  and  should 
bear  the  cost  of  all  injuries  occurring  in  connection  with  that  industry.  It  would 
not  be  necessary  or  advisable  that  all  employers  in  wood-working  industries  should 
bear  the  same  rate  of  insurance,  but  such  variations  as  were  found  from  experience 
or  otherwise  to  be  necessary  or  advisable  should  be  made  by  way  of  sub-classification. 

Administrative  Body. 

It  is  submitted  that  the  system  of  compensation  should  be  administered  by  a 
Government  Commission,  a  form  of  administration  well  understood  in  this  country 
and  well  adapted  for  dealing  with  a  subject  involving  so  many  complex  and  technical 
considerations.  It  is  suggested  that  the  Commission  be  called  the  Industrial 
Insurance  Commission  or  Board,  and  that  it  consist  of  three  Commissioners  ap- 
pointed by  the  Government.  The  Commission  should  be,  as  far  as  possible,  removed 
from  the  influence  of  party  politics.  Neither  in  the  adjudication  of  claims  nor  in 
the  fixing  of  rates  of  insurance  should  the  Commission  be  under  the  direct  control 
of,  or  directly  responsible  to,  the  Government  on  its  judicial  side.  The  Commission 
should  be  as  independent  of  the  executive  as  judicial  bodies  usually  are  in  this  and 
other  Anglo-Saxon  countries,  and  the  business  side  of  the  system  should  be  con- 
ducted upon  strict  business  lines.  It  is  urged  that  in  personnel,  salary  and  other- 
wise the  Commission  should  rank  at  least  with  the  High  Court  judgeship. 

Powers  of  Commission. 

The  working  out  of  the  details  of  the  system  should,  it  is  submitted,  be  left  a> 
largely  as  possible  to  the  Commission,  the  act  defining  clearly  the  scope  of  its  powers 
and  the  scale  of  compensation,  and  generally  outlining  the  procedure  and  operation. 

Methods  of  Collecting  Funds. 

As  to  the  method  of  collecting  funds  it  is  submitted  that  this  could  be  done 
either  through  the  banks  or  through  the  agency  of  the  municipal  officials  or  through 
both.  Forms  could  be  sent  out  to  employers  upon  which  to  report  as  to  the  amount 
or  estimated  amount  of  the  pay-roll.  In  case  of  default  in  reporting  and  in  the 
case  of  all  smaller  employers,  the  municipal  assessor  might  he  required  to  make  the 
necessary  report.  All  employers  within  the  scope  of  the  system  might  be  required 
8   L. 


114  CANADIAN"  MANUEACTUBEBS'  ASSOCIATION:  No.  65 

to  report  directly  to  the  Department,  with  appropriate  penalties  if  it  were  left  over 
for  the  assessor.  The  Commissioners  should  have  a  certain  number  of  auditors  for 
the  purpose  of  auditing  the  pay-rolls  of  employers  and  cheeking  over  the  reports  of 
assessors. 

Actuarial  Method. 

It  is  submitted,  as  already  indicated,  that  the  insurance  rates  should  be  based 
upon  the  current  cost  plan  as  distinguished  from  the  capitalized  plan.  In  other 
words  it  is  proposed  that  the  annual  assessments  upon  employers  shall  represent 
only  the  cost  of  the  current  year's  compensation  payments  with  merely  a  small 
margin  for  an  emergency  reserve  fund.  This  is  an  essential  feature  of  the  pro- 
position embodied  in  the  brief,  and  any  other  plan  would  be  unacceptable  to  the 
employers  represented  herein. 

It  is  believed  that  there  may  be  instances  where  it  would  be  advisable  to  collect 
the  full  estimated  capital  fee.  An  example  would  be  the  case  of  a  foreign  contractor, 
temporarily  engaged  in  building  operations  in  the  province.  But  the  general  rule 
should  be  the  assessment  of  the  current  year's  requirements  for  compensation  outlay. 

It  is  submitted  that  it  might  be  wise  to  place  the  fund  for  each  class  of  industry 
at  an  early  stage,  on  a  footing  which  would  render  it  unnecessary  to  assess  premiums 
in  advance.  The  rates  in  each  class  could  be  made  high  enough  for  the  first  few 
years  to  provide  a  reserve  sufficient  to  tide  over  one  year.  The  assessments  could 
then  be  made  at  the  end  of  the  year  and  the  double  work  incidental  to  assessments 
on  estimates  and  their  readjustment  would  be  obviated. 

It  is  submitted  that  it  would  be  inconvenient  to  include  the  schedule  of  rates 
in  the  statute  establishing  the  system.  The  schedule  will  be  a  subject  for  a  techni- 
cal actuarial  treatment  in  the  first  instance,  and  merely  a  matter* of  adjusting  and 
collecting  the  amount  required  for  the  year. 

The  grouping  of  industries  for  assessment  purposes  is  a  matter  also  for  expert 
actuarial  treatment,  but  it  has  also  practical  phases  which  might  make  it  advisable 
to  provide  a  preliminary  classification  in  the  Act  itself.  But  the  commission  should 
have  power  to  combine  and  sub-classify  as  experience  may  demand. 

Control  of  Rates. 

Subject  to  some  provision  insuring  that  the  rates  of  insurance  shall  in  general 
be  based  on  the  current  cost  plan,  the  rates  should  be  entirely  under  the  control  of 
the  Commission.  Facilities  should  be  afforded,  however,  for  the  hearing  of  appli- 
cations, complaints,  and  representations  on  behalf  of  individual  employers  or  assoc- 
iations, representing  groups  of  employers  with  respect  to  rates,  classifications  and 
other  matters  connected  with  the  administration  of  the  system. 

Adjustment  of  Claims. 

Claims  for  compensation  should  be  adjusted  by  the  Commission.  It  might  be 
found  possible  eventually  to  delegate  tbe  adjustment  of  ordinary  claims  to  subordin- 
ate adjusters;  or  to  adjust  claims  pro  forma  upon  the  report  of  a  secretary  or  other 
subordinate  official,  who  would  examine  the  application  and  report  to  the  commis- 
sion thereon.  Bui  in  tbe  formative  stages  of  tbe  system  when  precedents  and  policies 
are  being  establisbed  it  is  submitted  that  every  claim  should  come  before  the 
Commission  itself  for  decision. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.      ^  115 

As  already  suggested  the  Commission  could  adjust  claims  in  most  cases  upon 
duly  verified  reports  from  the  injured  workman  or  his  representative,  from  the 
employer  or  his  foreman  or  superintendent  and  from  the  attending  physician.  If 
any  dispute  of  fact  were  disclosed  by  these  reports  evidence  could  he  taken  by  the 
Commission,  or  a  special  officer  could  be  sent  to  investigate  and  report  upon  the 
case. 

Appeals. 

In  adjudicating  upon  claims  the  decision  of  the  Commission  should  it  is  sub- 
mitted, be  final  upon  questions  of  fact.  It  is  suggested  that  an  appeal  might  lie  in 
questions  of  law  (which  would  be  rare)  to  the  Court  of  Appeal  for  Ontario.  It  is 
further  suggested  that  for  the  purpose  of  deciding  upon  such  questions  of  law  there 
should  be  facilities  for  the  submission  of  stated  cases  by  the  Commission  itself  and 
that  appeals  should,  where  possible,  be  brought  in  this  form. 

Method  of  paying  compensation. 

As  to  the  payment  of  periodical  compensation  allowances  it  is  submitted  that 
this  could  be  effected  through  the  agency  of  the  banks.  Warrants  could  be  sent  out 
to  those  entitled  to  compensation,  payable  upon  presentation  to  any  bank.  It  would 
be  very  convenient,  if  it  were  possible  to  make  an  arrangement  with  the  Dominion 
Government,  to  utilize  the  Post  Office  for  the  payment  of  compensation  claims.  If 
the  banks  were  used  as  above  suggested  the  funds  of  the  Department  might  be 
apportioned  amongst  the  various  banks  in  deposits  proportionate  to  the  service 
rendered. 

Employers'  Associations. 

The  difference  between  such  a  system  as  that  here  recommended  and  the 
German  system  is  that  the  collection  of  premiums  and  the  adjudication  of  claims, 
which  in  Germany  are  functions  primarily  exercised  by  the  employers'  associations, 
would  under  the  proposed  system  be  assumed  by  the  state.  The  balance  of  the 
functions  of  the  German  employers'  associations  could,  and  doubtless  would,  be 
assumed  by  associations  voluntarily  formed  and  corresponding  generally  to  the 
groups  into  which  employers  were  divided  for  assessment  purposes.  The  state 
having  assumed  the  functions  of  collection  and  dispersion  of  funds,  the  formation 
of  the  associations  would  not  be  a  vital  necessity  and  the  compensation  system  would 
operate  notwithstanding  the  absence  of  the  associations ;  but  there  can  be  no  doubt 
that  there  would  be  strong  inducements  upon  employers  to  organize  for  the  purpose 
of  co-operative  effort  in  preventing  accidents,  and  otherwise  promoting  efficiency 
and  economy  in  the  administration  of  the  system.  It  is  submitted  that  the  Act 
should  afford  practical  facilities  for  the  organization  of  such  voluntary  associations 
and  for  their  participation  and  assistance  in  the  operation  of  the  system. 

Provision  might  be  made  for  the  approval  by  the  Commission  of  the  constitution 
of  such  associations  and  their  official  recognition.  Such  associations  might  be 
given  power,  under  the  supervision  of  the  Commission,  to  engage  experts  in  accident 
prevention  payable  out  of  the  accident  insurance  fund.  They  might  also  be  given 
the  power  to  make  and  enforce  rules  approved  by  the  Commission  for  the  prevention 
of  accidents,  and  to  act  in  other  ways  calculated  to  promote  the  success  of  the  system. 


116  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


First  Aid  Funds. 

i 

It  is  submitted  that  the  benefit  societies  which  are  now  in  operation  in  many 
industries  should  be,  as  far  as  possible,  preserved.  In  order  to  secure  a  suitable 
scope  for  these  societies  and  in  order  to  provide  facilities  for  prompt  medical  and 
hospital  attention,  and  generally  for  the  co-operation  of  employees  with  employers 
in  promoting  safety,  a  separate  fund  should  be  established  to  cover  the  first  few 
weeks.  Out  of  this  fund  should  be  paid  medical  and  hospital  expenses  and  com- 
pensation for  the  earlier  weeks  after  an  injury.  The  suggestion  is  made  that  this 
period  should  cover,  as  in  Germany  and  in  most  other  countries,  the  first  thirteen 
weeks. 

It  is  submitted  that  the  premiums  for  the  first  aid  fund  should  be  collected  in 
the  same  way  and  at  the  same  time  as  the  premiums  for  the  larger  fund.  But  it  is 
suggested  that  after  being  collected  the  money  might  be  handed  over  to  local  benefit 
societies  working  under  constitutions  approved  by  the  Commission,  for  administra- 
tion. Where  such  benefit  societies  did  not  exist  the  money  could  be  handled  by  the 
central  department. 

Of  the  premiums  for  the  first  aid  fund  it  is  submitted  that  workmen  should 
pay  a  substantial  proportion,  and  that  each  workman's  portion  should  be  deducted 
monthly  or  quarterly  from  his  wages. 

F  W.  Wegenast. 
Solicitor,  Canadian  Manufacturers'  Association, 


1912 


WO U K M  K  X  'S  CO M  P !•:  X  SATTOX  COMMISSION'. 


117 


No. 


Appendices 


APPENDIX    I. 
COMPARISON  OF  UNITED  STATES  AND  GERMAN  STATISTK  - 


Occupations. 


Population. 


Germany, 
1907. 


United  States, 
1900. 


Agriculture.  Horticulture,  Stock  Raising,  Forestry,  etc.. 

Industry 

Trade  and  Transportation 

Domestic  and  Personal  Service 

Professional  and  Public  Service 


Totals . 


9,883,257 

11,256,254 

3,477,626 

471,695 

1,738,530 


26,827,362 


10,381  765 
7,085,309 
4,766,964 
5,580,657 
1,258,538 


29,073,233 


Public  Officials  and  Soldiers  in  the  United  States  are  covered  under  No.  4, 
in  Germany  under  No.  5. 


APPENDIX  II, 

STATISTICAL  EXPERIENCE   OF  WORKINGMEN  UNDER  THE   OPER- 
ATION OF  COMPULSORY  STATE  INSURANCE  IN  GERMANY. 

Brief  of  J.  Harrington  Boyd,  before  Federal  Commission  on 
Workmen's  Compensation — P.  73. 

In  1887  there  were  insured  against  sickness  and  accidents  in  Germany  3,861,- 
560  workingmen  among  319,453  establishments,2  and  the  number  of  notices  of 
accidents  was  106,101.  A  special  analysis  of  the  different  elements  of  the  causes 
of  these  accidents  will  be  found  below: 

In  1907,  insured  in  Germany  against  accidents;3 

Persons 
Injured. 
Industrial,  building,  and  marine  trade  associations   (Associa- 
tions, 66;   establishments,  637,118)    9,018,367 

Agriculture  and  forestry  trade  associations  (Associations,  48; 

establishments,    4.710,401)     11,189,071 

State  executive  boards   (boards,  535)    964,589 

21,172,027 

In  1897  there  were  insured  in  Germany  against  accidents  in  the  same  associa- 
tions and  409  State  executive  boards,  in  round  numbers2  18,500,000. 

1  S.  &  E.,  25. 

'Fourth  Special  Report  of  the  Commission  of  Labor,  1893. 

»F.  &  D.,  101. 


118  CANADIAN"  MANUFACTURERS'  ASSOCIATION:  No.  65 


APPENDIX  III. 

Excerpts  from  article  on  "  The  Eoad  to  Social  Efficiency/''  by  Louis  A. 
Brandeis,  in  New  York  Outlook,  June  10th,  1911.     Showing  Possi- 
bilities in  The  Eield  of  Accident  Prevention. 

Possibilities  of  lengthening  lives  and  of  avoiding  sickness  and  invalidity,  like 
the  possibilities  of  preventing  accidents,  will  be  availed  of  when  business  as  well  as 
humanity  demands  that  this  be  done. 

William  Hard  quoted  Edward  T.  Davies,  the  Factory  Inspector  of  Illinois,  as 
saying  that  in  the  year  1906  one  'hundred  men  were  killed  or  crippled  in  the 
factories  of  Illinois  by  the  set-screw,  and  that  for  thirty-five  cents  in  each  instance 
this  danger  device  could  have  been  recast  into  a  safety  device.  The  set-screw 
stands  up  from  the  surface  of  the  rapidly  revolving  shaft,  and  as  it  turns  catches 
dangerously  hands  and  clothes.  For  thirty-five  cents  the  projecting  top  of  the  set- 
screw  could  be  sunk  flush  with  the  rest  of  the  whirling  surface  of  the  shaft,  and 
then  no  sleeve  could  be  entangled  by  it,  and  no  human  body  could  be  swung  and 
thrown  by  it. 

The  South  Metropolitan  Gas  Company,  which  established,  in  connection  with 
its  system  of  compensation  for  accidents,  a  system  of  inquiry  into  all  accidents  with 
a  view  to  their  prevention,  reduced  the  number  of  accidents  per  thousand  in  seven 
years  from  sixty-nine  to  forty. 

Jack  Calder,  of  Ilion,  New  York,  tells  of  the  reduction  of  accidents  in  an 
American  plant  of  a  yearly  average  of  two  hundred  to  sixty-four. 

Can  there  be  any  doubt  that  if  every  accident  had  to  be  investigated  carefully 
and  adequately  compensated  for,  the  number  of  accidents  would  be  reduced  to  a 
half  or  a  third. 

The  social  and  industrial  engineers  will  find  much  of  inspiration  and  en- 
couragement in  the  achievement  of  their  fellow-engineers  of  the  factory  mutual 
fire  insurance  companies  of  New  England. 

The  huge  fire  waste  in  America  is  a  matter  of  common  knowledge.  The  loss 
in  1910  was  estimated  at  $234,000,000;  and  yet  there  is  one  class  of  property,  in 
its  nature  peculiarly  subject  to  fire  risks,  which  was  practically  immune.  Some 
2,600  factories  and  their  contents  valued  together  at  about  $2,220,000,000  and 
scattered  throughout  twenty-four  States  and  the  Dominion  of  Canada,  suffered  in 
the  aggregate  fire  losses  of  about  one-fortieth  of  one  per  cent,  of  the  value  insured. 
The  factories  so  immune  were  those  owned  by  members  of  the  so-called  "  factory 
mutuals  "  of  New  England.  The  cost  of  these  factories  for  fire  insurance  and  fire 
prevention  in  the  year  1910  was  only  forty-three  cents  for  each  one  thousand  dollars 
of  property  insurance.  Half  a  century  before  the  cost  of  insurance  to  the  New 
England  factories  was  $4.30,  or  ten  times  as  great.  The  record  of  the  "factory 
mutuals  "  of  Rhode  Island  and  of  some  other  States  is  similar. 

Now,  how  has  this  reduction  of  fire  insurance  cost  been  accomplished  ?  It  was 
done  by  recognizing  that  the  purpose  of  these  so-called  fire  insurance  companies  is 
not  to  pay  losses  but  to  prevent  fires.  These  mutual  companies  might  more  ap- 
propriately  have  been  called  Fire  Prevention  Companies;  for  the  losses  paid  repre- 
sent merely  instances  of  failure  in  their  main  purpose.  In  these  corporations  the 
important  officials  are  not  the  financiers  but  the  engineers — men  who  rank  among 
the  leaders  in  the  engineering  profession  of  America — and  aiding  them  is  a  most 
efficient  corps  of  inspectors. 

The  achievement  of  these  factory  mutuals — the  elimination  of  ninety  per  cent, 
of  the  risks— is  iho  result  of  sixty  years  of  unremitting  effort  in  ascertaining  and 


1912 


WORKMEN'S  COMPENSATION  COMMISSION. 


119 


removing  causes  of  fires  and  incidentally  educating  factory-owners  and  their  em- 
ployees in  the  importance  of  providing  against  these  causes.  The  premiums  paid 
represent  the  cost  of  this  advice,  inspection  and  education  as  much  as  the  cost  of 
what  is  ordinarily  termed  insurance. 

The  progress  of  the  factory  mutuals  in  reducing  fire  losses  was  relatively  slow, 
but  it  has  been  steady,  as  is  shown  in  the  following  table  of  net  cost  of  fire  insurance 
per  $1,000  per  year  in  two  representative  companies: 


Years. 

Boston  Manufacturers 

Mutual  Fire 
Insurance  Company. 

Arkwright  Mutual 

Fire  Insurance 

Company. 

1850-60 

$4  37 
2  79 
2  54 
2  27 
1  44 
0  68 
0  44 

1861-70 

$3  37 

1871-80 

3  00 

1881-90 

2  16 

1891-1900 

1  54 

1901-1910 

0  69 

Year  1910 

0  43 

Possibilities  no  less  alluring  are  open  to  the  social  and  industrial  engineer. 
Will  the  community  support  their  efforts? 


APPENDIX  IV. 


ANALYSIS  OF  DRAFT  BILL  OF  STATE  OF  WASHINGTON. 

By  Harold  Preston,  Solicitor  for  Investigating  Commission  and  Draftsman 

of  the  Act. 

The  proposed  Washington  Act  abrogates  the  doctrine  of  negligence  as  between 
employer  and  workman;  removes  the  subject  from  the  domain  of  private  contro- 
versy; asserts  and  assumes  the  subject  to  be  within  the  police  power  of  the  state; 
and  deprives  the  courts  of  jurisdiction  in  the  premises,  except  in  the  administration 
of  the  act.  There  are  certain  exceptions:  (1)  Where  the  injury  was  caused  by  the 
intent  of  the  employer  to  produce  it;  (2)  Where  the  injury  is  caused  by  the  intent 
of  the  workman  to  produce  it;  and  (3)  Where  the  employer  upon  demand  refuses 
to  contribute  to  the  fund  for  the  creation  of  which  provision  is  made  in  the  act.  In 
the  case  of  (1)  the  workman  takes  under  the  act  and  may  sue  the  employer  for  any 
excess  of  damage  over  the  amount  received  under  the  act.  In  the  case  of  (?)  the 
workman  receives  nothing  under  the  act;  and  in  the  case  of  (3)  the  employer  is 
suable  at  law.  the  defences  of  fellow  workman  and  assumption  of  risk  abolished  and 
the  doctrine  of  comparative  negligence  established. 

The  act  applies  only  to  occupations  defined  in  the  act  as  "extra  hazardous." 
There  are  two  funds  provided  for  by  the  act:  the  first-aid  fund,  and  the  accident 
fund.  The  first  aid  fund  is  created  by  the  monthly  payment  into  the  state  treasury 
by  each  employer  of  four  cents  per  day  for  each  day's  work  done  for  him  during  the 
preceding  month.  Of  this  he  deducts  two  cents  from  the  wages  of  the  workmen. 
Out  of  this  fund  all  injured  workmen  receive  the  necessary  medical,  surgical  and 
hospital  attendance  so  long  as  required,  and  also  for  the  first  three  weeks  of  in- 
capacity $5.00  per  week.     The  accident  fund  is  created  by  the  payment  into  the 


120  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

state  treasury  by  such  employer  of  a  certain'  percentage  of  his  annual  pay-roll,  the 
percentage  varying  with  the  degree  of  hazard  inherent  in  the  occupatioa.  It  is 
paid  annually  in  advance,  calculated  upon  the  past  year's  pay-roll;  if  there  is  none 
such,  upon  an  estimated  pay-roll.  The  department  may  permit  the  payment  to  be 
made  in  quarterly  instalments.  At  the  end  of  the  year  an  adjustment  is  to  be 
made.  Undue  carelessness  upon  the  part  of  any  employer  may  result  in  the  in- 
crease (for  future  application)  of  his  rate  of  contribution.  At  the  end  of  each  year 
an  accounting  is  had  with  each  class  of  industries,  and  if  it  proves  to  have  paid  in 
too  much  the  excess  is  refunded;  but,  on  the  other  hand,  it  too  little,  the  deficiency 
is  made  good  upon  the  same  basis  as  the  original  contribution. 

Out  of  the  accident  fund  cases  of  death  or  incapacity  over  three  weeks  are  cared 
for.     Permanent  partial  injuries  are  compensated  in  lump  sum  payments,  $1,500 
being  the  maximum  amount,  and  the  loss  of  a  major  arm  at  or  above  the  elbow,  the 
maximum  injury.   Lesser  permanent  partial  injuries  are  compensated  in  proportion. 
All  other  cases  are  compensated  in  monthly  payments.     These  may  be  converted, 
in  whole,  or  in  part,  into  lump  sum  payments  in  the  discretion  of  the  department, 
the  previous  application  of  the  beneficiary  being  necessary,  except  where  the  ben- 
eficiary removes  from  the  state.       The  amount  of  lump  sum  payments  may  be 
settled  by  agreement  between  the  beneficiary  and  the  department  within  a  certain 
limitation,  to-wit :  that  a  payment  of  $20  per  month  to  a  person  30  years  of  age  is 
worth  $1,000,  each  settlement  being  based  upon  the  expectancy  of  life  under  the 
American  Mortality  Tables.     The  monthly  compensation  is  all   at  flat  amounts. 
The  earning  power  is  not  taken  into  consideration  (except  in  one  case  hereinafter 
referred  to).     In  death  cases  funeral  expenses  not  to  exceed  $75  are  paid.     If  the 
decedent  was  unmarried  and  had  no  dependent,  no  further  payment  is  made.     A 
dependent  is   a  relative    (among   an   enumerated  list)    who   was   receiving  actual 
pecuniary  assistance  from  the  decedent,  prior  to  his  death   (he  having  been  un- 
married at  the  time  of  his  death).     Such  a  dependent  receives  monthly  one-half  of 
one-twelfth  of  the  amount  of  pecuniary  assistance  actually  rendered  the  dependent 
by  the  decedent  during  the  year  preceding  the  accident.       If  the  decedent  left  a 
widow  she  receives  $20  a  month  as  long  as  she  shall  live  unmarried.       Upon  re- 
marriage she  receives  twelve  monthly  payments  and  no  more.     The  widow  receives 
$5  extra  per  month  for  each  child,  not  to  exceed  $15  per  month.     If  orphan  chil- 
dren survive  they  receive  $10  per  month  each,  not  to  exceed  $35  for  all  of  them. 
Payments  to  or  on  account  of  a  child  cease  when  the  child  becomes  16  years  of  age. 
If  the  workman  survives  the  acident  and  is  permanently  totally  incapacitated  he 
receives,  if  unmarried,  $20  per  month  so  long  as  the  total  incapacity  continues.    If 
married,  he  receives  $5  per  month  extra  and  $5  per  month  extra  for  each  child,  the 
total  not  to  exceed  $35  per  month  (and  the  payment  on  account  of  any  child  ceasing 
at  the  sixteenth  birthday).     If  the  incapacity  is  only  temporary,  the  same  monthly 
payments  are  made  increased  for  the  first  six  months  50  per  cent.,  provided  that 
the  increase  shall  not  operate  to  make  the  monthly  payment  exceed  60  per  cent,  of 
the  monthly  wage.     As  long  as  the  injured  workman  is  able  to  make  earnings  in 
any  way  the  monthly  paymenl  is  scaled  down  accordingly. 

If  the  accident  is  brought  about  because  of  the  absence  of  any  safeguard  or 
protective  device  required  by  statute  or  ordinance  or  by  public  regulation  under  any 
statute,  the  employer  is  required  to  pay  into  the  fund  50  per  cent,  of  the  payment 
made  oul  of  the  fund  on  account  of  the  injury,  if  he  is  responsible  for  the  absence 
of  the  safeguard.  Whereas,  if  the  workman  is  responsible  for  its  absence,  his  com- 
pensation is  reduced  10  per  cent. 

A  State  Department  is  created  to  administer  the  act,  composed  of  three  com- 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  121 

missioners  appointed  by  the  Governor.  The  legislature  appropriated  $150,000  out 
of  the  general  fund  to  pay  the  operating1  expenses  of  the  department  until  the  next 
legislative  session.  Except  as  to  a  few  matters  left  discretionary  with  the  depart- 
ment, appeal  lies  to  the  courts  from  the  decision  of  the  department  at  the  instance 
of  any  person  feeling  aggrieved,  such  appeal  to  be  only  upon  questions  of  fact  or 
proper  construction  of  the  act.  The  proceeding  is  informal  and  summary;  jury 
trials  being  provided  only  in  cases  arising  under  the  penalizing  provisions  of  the  act. 
If  the  department  ruling  is  reversed  or  modified  the  proper  fund  must  bear  the 
expense  of  the  litigation,  including  the  attorney's  fee  to  be  fixed  by  the  court. 

The  intent  is  declared  that  the  fund  shall  be  no  more  and  no  less  than  self 
supporting.  Every  dollar  paid  in  by  employers  must  go  to  injured  workmen, 
except  in  case  the  expense  appropriation  should  run  out  between  sessions,  in  which 
case  the  deficit  is  made  good,  85  per  cent.,  out  of  the  first  aid  fund  and  15  per  cent, 
out  of  the  accident  fund.  The  State  Treasurer  is  required  to  keep  the  funds  in- 
vested at  interest  in  the  class  of  securities  provided  by  law  for  the  investment  of 
the  permanent  school  fund,  and  any  uninvested  funds  to  be  kept  on  deposit  at 
interest  on  daily  balances  in  such  banks  as  have  been  approved  by  the  State  Board 
of  Finance. 

In  order  that  each  year  may  provide  for  its  own  expenses  the  State  Treasurer 
is  required,  as  soon  as  the  liability  of  the  fund  is  determined  in  any  individual  case, 
to  segregate  from  the  fund  the  amount  necessary  (subject  to  the  $1,000  maximum) 
to  take  care  of  that  case  and  keep  it  invested,  as  above  stated,  being  privileged  to 
borrow  from  the  general  fund  for  that  case  moneys  necessary  to  meet  monthly 
payments,  pending  a  conversion  into  cash  of  a  security  belonging  to  the  case. 


APPENDIX  V. 

December  27,  1911. 
F.  W.  Wegenast,  Esq.., 

General  Counsel,  Canadian  Manufacturers  Association,  Toronto,  Canada. 

Dear  Sir:  Your  favour  of  the  21st  instant  received.  I  have  read  with  much 
interest  the  report  of  your  Special  Committee,  with  the  preparation  of  which  I  have 
no  doubt  you  personally  took  considerable  part.  I  think  the  report  is  splendid  and 
hope  it  will  have  good  results  in  connection  with  the  framing  of  your  proposed 
legislation. 

There  are  two  points  in  it  where  I  am  in  disagreement.  The  first  is  in  speak- 
ing of  the  Washington  plan  as  a  plan  of  state  insurance.  I  think  it  would  be  more 
correctly  described  as  a  system  of  collective  liability  administered  by  the  State.  At 
the  same  time,  your  recommendation  of  the  State  being  back  of  the  fund  is  a  good 
one.  In  some  of  the  earlier  drafts  of  the  bill  I  had  it  provided  that  if  an  injured 
workman  found  a  deficit  in  the  fund  applicable  to  his  case,  the  State  should  make  it 
good  out  of  its  general  fund  and  then  recoup  itself  later  out  of  the  industry  involved. 
We  have  the  constitutional  provision  forbidding  the  State  to  loan  its  credit  to  any 
other  than  a  public  use,  and  we  had  decisions  in  other  States  passing  upon  like 
constitutional  provisions  which  rendered  the  provision,  as  I  had  it  so  incorporated, 
of  doubtful  constitutionality.  The  line  of  argument  pursued  by  these  decisions 
referred  to  was  that  the  contribution  of  the  state  was  not  confined  to  cases  of 
pauperism ;  in  other  words,  the  injured  workman  might  have  money  in  the  bank  and 


122  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 

. . — . ( 

other  property  and  still  receive  the  same  aid  as  the  indigent  injured  workman. 
You  have  no  such  constitutional  clause  to  contend  with  and,  therefore,  you  are  in  a 
position  to  improve  upon  our  work  in  that  respect. 

The  other  point  is  the  non-provision  by  the  present  for  the  liabilities  of  the 
present,  although  I  acknowledge  that  your  plan  has  much  in  its  favour  because  it  is 
the  first  step  to  be  taken.  The  first  step  being  so  taken,  in  the  course  of  a  few 
years  statistics  will  be  gathered,  the  plan  better  understood,  and  it  might  then 
become  possible  and  advisable  to  make  the  present  care  for  its  own  cases. 

Yours  truly, 
Harold  Preston. 


APPFNDIX  VI. 

Extract  from  the  New  York  Journal  oe  Commerce,  November  11th, 

1911,  PER. 

BAD  LIABILITY  LOSS. 
In  State  of  Washington  under  the  New  Law. 

The  news  comes  from  Seattle,  Wash,  that  George  A.  Lee,  Chairman  of  the 
Industrial  Insurance  Commission,  has  announced  that  the  claims  for  the  death  of 
eight  girls  in  the  powder  mill  horror  at  Chehalis,  Wash.,  must  under  the  law  be  paid 
by  assessments  levied  on  the  powder  manufacturers  of  the  State.  There  are  only 
three  concerns  engaged  in  this  industry  and  it  is  likely  that  the  assessments  will  be 
heavy.  At  present  there  is  about  $270  in  this  branch  of  the  insurance  fund  to  pay 
the  claims.  The  maximum  which  can  be  allowed  the  claimants  is  $32,000,  or 
$4,000  for  each  death,  but  it  is  the  opinion  of  the  Attorney-G-eneral  that  the  law 
does  not  require  the  payment  of  $1,000  for  the  death  of  a  minor. 

Just  exactly  what  is  the  economic  value  of  a  minor  is  a  question  which  the 
Attorney-General  and  the  Industrial  Insurance  Commission  will  be  called  upon  to 
decide  shortly.  The  section  of  the  Workmen's  Compensation  Act  which  will  likely 
apply  to  the  Chehalis  case  is  as  follows : 

"  If  the  workman  is  under  the  age  of  twenty-one  years  and  unmarried  at  the  time 
of  his  death,  the  parents  shall  receive  $20  per  month  for  each  month  after  his  death 
until  the  time  at  which  he  would  have  arrived  at  the  age  of  twenty-one  years." 

Whether  sub-section  (e)  of  Section  5  applies  to  minors  is  a  point  which  must 
be  passed  upon  by  the  Attorney-General.  The  question  has  never  been  raised 
beforo  the  Commission.     The  division  referred  to  reads  as  follows: 

"  For  every  case  of  injury  resulting  in  death  or  permanent  total  disability,  it  shall 
be  the  duty  of  the  department  to  forthwith  notify  the  State  Treasurer,  and  he  shall  set 
apart,  out  of  the  accident  fund,  a  sum  of  money  for  the  case,  to  be  known  as  the  esti- 
mated lump  sum  value  of  the  monthly  payments  provided  for  it,  to  be  calculated  upon 
the  theory  that  a  monthly  payment  of  $20  to  a  person  thirty  years  of  age  is  equal  to  a 
lump-sum  payment,  according  to  the  expectancy  of  life,  as  fixed  by  the  American  mor- 
tality table,  of  $4,000,  but  the  total  is  in  no  case  to  exceed  the  sum  of  $4,000." 

In  no  case  will  any  other  industry  in  the  state  but  the  powder  mills  be  affected 
by  the  Chehalis  tragedy.     The  law  makes  no  provision   for  borrowing  from  any 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  123 

other  branch  of  the  accident  fund.  The  powder  mills  must  bear  the  burden  of  the 
accidents  in  their  own  class  without  reference  to  any  other  industry.  In  the  event 
that  the  Commission  allows  the  claim  on  the  basis  that  the  parents  or  dependents 
of  the  girls  shall  receive  $20  a  month  until  such  a  time  as  they  would  have  arrived 
at  the  age  of  twenty-one  years,  the  total  expense  of  the  claims  will  be  approximately 
as  follows: 

Vera  Mulford,  aged  14  $1,680 

Bertha  Crowne,  aged  16    1,200 

Tillie  Rosbach,  aged  18  720 

Sadie  Westfall,  aged  16    1,200 

Eva  Giknore,  aged  17   960 

Bertha  Nagle,  aged  17   960 

Ethel  Tharp,  aged  20   200 

Mrs.  Ethel  Henry   (who  leaves  seven-month-old  baby)    3,700 

Total     $10,660 

The  $270  in  the  powder  company  fund  was  paid  in  by  the  Imperial  Company 
and  the  Puget  Sound  Alaska  Company,  on  the  basis  of  ten  per  cent,  of  the  pay-roll. 

The  DuPont  Company  has  not  paid  in  its  first  assessment.  It  objected  to 
being  assessed  at  the  same  rate  as  the  other  companies,  and  wanted  a  lower  rate. 
Commissioner  C.  A.  Pratt  and  J.  H.  Wallace  inspected  the  plant,  and  say  that 
the  company  has  done  everything  possible  to  protect  its  workers,  but  the  law  fixes 
the  schedule  of  rates.  However,  the  law  fixes  the  minimum  and  now  the  Imperial 
Company  may  be  assessed  a  higher  rate  than  any  other  company.  It  will  probably 
be  some  time  before  the  matter  is  straightened  out  by  the  officials.  The  law  has 
been  held  constitutional  by  the  Supreme  Court,  but  its  various  sections  have  not 
been  interpreted  up  to  this  time.  The  point  as  to  whether  $4,000  has  to  be  set  aside 
for  the  death  of  each  minor  is  the  most  important  of  these  raised  up  to  the  present 
time. 


APPENDIX  VII. 

Olympia,  Wash.,  Dec.  20th,  1911 

F.  W.  Weghenast,  Esq., 

General  Counsel,  Canadian  Manufacturers'  Association,  Toronto,  Ont. 

Your  communication  of  recent  date  to  hand.     We  were  very  much  surprised 

indeed  to  observe  the  statement  made  by ;  it  is  an  absolute 

mis-statement  of  the  facts.  Attached  hereto  you  will  find  a  tabulation  of  the  pay- 
ments into,  and  disbursements  out  of  the  47  funds  listed  in  our  law,  and  No.  4§, 
which  is  the  "  Non-hazardous  elective."  You  will  observe  that  we  have  taken  in 
nearly  $400,000.00  and  paid  out  to  date  less  than  $14,000.00. 

The  only  important  fact  which  the  powder  class,  No.  46  teaches  is  the  undesir- 
ability  of  small  classes.  It  does  not  give  sufficient  opportunity  for  distribution 
of  risk.  In  our  State,  the  situation  is  aggravated  in  this  one  small  class  by  the 
fact  that  the  big  DuPont  Powder  Company  have  so  far  refused  to  pay,  proposing 
to  contest  the  constitutionality  of  our  law  in  the  Federal  Courts. 

I  attach  hereto  a  communication  issued  by  the  State  Federation  of  Labour 
which  is  eloquent  of  the  appreciation  of  this  State. 


124  CANADIAN"  MANUFACTURERS'  ASSOCIATION:  No.  65 

Our  objection  in  Washington  to  the  English  Act  and  the  New  York  Act 
are  discussed  in  that  paper.     They  are  principally: 

1.  Dependants  cast  off  on  to  charity  after  a  brief  term  of  years. 

2.  The  slow  and  costly  court  machinery  retained. 

3.  Economic  waste  in  payment  of  unnecessary  lawyers  and  casualty  companies. 

4.  Employers'  funds  drained  out  of  the  State. 

5.  State  activity  and  public  education  for  accident  prevention  not  emphasized. 

6.  Rates  governed  by  competition  and  conditions  in  other  states  rather  than 
our  own. 

7.  Statistical  work  by  the  state  important  to  public  welfare  not  performed. 

With  due  seasonal  greetings,  I  am 

Very  cordially  yours, 

The  Industrial  Insurance  Commission. 

By  Hamilton  Higday, 

Commissioner. 


APPENDIX  VIII. 
COPY  OF  CIRCULAR. 
Washington  State  Federation  of  Labour. 
To  the  Trade  Unions  of  the  State,  Greeting : 

The  Workmen's  Compensation  Act  which  became  effective  October  first, 
is  daily  demonstrating  its  value  to  the  injured  workmen.  Under  its  provisions 
many  victims  of  industrial  accidents  are  receiving  compensation,  who,  under  the 
old  system,  would  have  become  a  burden  upon  friends  or  subjects  of  charity.  Two 
months  of  experience  has,  however,  demonstrated  the  necessity  of  every  organiza- 
tion, whether  labour,  fraternal,  or  social,  that  has  the  welfare  of  its  membership 
at  heart,  participating  more  actively  in  the  securing  of  prompt  attention  in  behalf 
of  its  membership. 

Employers  who  have  hitherto  felt  called  upon  to  guard  against  the  possibility 
of  recovery  of  damages  are  slow  to  awake  to  a  realization  of  the  changes  effected 
by  the  new  law. 

Casualty  Companies  that  have  derived  immense  profits  under  past  conditions, 
are  opponents  of  a  system  that  takes  away  their  source  of  revenue.  Ambulance- 
chasing  lawyers,  who  have  lived  off  damage  suits,  which  they  were  able  to  promote 
under  the  old  liability  system,  are  joining  hands  with  agents  of  Casualty  companies 
and  opposing  employers  in  an  endeavour  to  discredit  the  new  law. 

It  is  the  duty  of  our  organizations  to  rally  to  its  support,  and  gain  for  our 
membership  full  and  prompt  returns  for  injured  workmen.  To  that  end  each 
organization  should  instruct  its  officers  or  the  proper  committees: 

First :  To  secure  from  the  Industrial  Insurance  Commission,  Olympia,  Wn. 
copies  of  the  law  and  necessary  blanks  to  be  filled  out  in  case  of  injuries  to  em- 
ployees received  in  the  course  of  their  employment. 

Second:     To  thoroughly  familiarize  themselves  with  the  law. 


1912  WOKKMEN'S  COMPENSATION"  COMMISSION".  125 

Third:  To  look  after  injured  members,  or  in  case  of  death,  their  heirs,  and 
see  that  necessary  blanks  are  promptly  tilled  out  and  forwarded  to  the  Commission. 

Fourth :  To  report  to  your  organization  and  the  State  Federation  of  Labour 
any  defects  found  in  the  law,  its  operation,  enforcement,  and  other  difficulty 
encountered  to  the  end  that  we  may  look  to  a  future  adjustment  of  same. 

Bear  in  mind  that  every  injury  should  be  reported  whether  serious  or  not; 
that  all  injured  workmen  in  hazardous  employments  are  entitled  to  compensation 
from  the  day  of  injury.  Aid  them  in  getting  it,  and  you  will  not  only  aid  the 
needy  but  lessen  the  drain  upon  your  local  treasuries. 

For  your  convenience  we  enclose  card  properly  addressed  upon  which  you 
can  designate  your  needs  as  to  copies  of  law  and  blank  forms  which  should  be 
kept  on  tile  by  the  organization  in  order  to  make  prompt  reports. 

Trusting  that  you  will  co-operate  fully  with  us  in  making  a  success  of  this 
important  legislation,  we  remain. 

Yours  fraternally, 
Charles  Perby  Taylor,  Chas.  E.  Case, 

Secy-Treas.  President. 


APPENDIX  IX. 

Olympia,  Wash,  Dec.  20th,  1911. 
The  Governor, 

Lansing,  Michigan. 

My  dear  Sir : 

The  attention  of  this  Commission  has  been  called  to  a  report  to  the  effect 
that  one  of  the  members  of  your  Compensation  Commission  "has  just  returned 
from  Washington  and  found  there  a  most  lamentable  condition  of  affairs.  The 
liabilities  already  accrued  against  the  State  exceed  by  an  enormous  amount  the 
amount  of  money  on  hand.  There  was  an  explosion  there  where  I  understand 
nine  lives  were  lost,  making  an  aggregate  liability  of  $27,000,  and  there  was  only 
$177.00  in  the  State  treasury.  Then,  too,  the  State  is  being  deluged  with  all 
sorts  of  petty  claims;  every  man  who  has  a  finger  hurt  seems  to  think  the  State 
treasurer  must  recompense  him." 

This  Commission  has  no  interest  in  the  particular  system  of  legislation  your 
Commission  approves,  but  it  is  unfair  to  this  State  and  to  Michigan  that  such  an 
absolute  misrepresentation  of  the  true  facts  stand  uncorrected. 

The  compulsory  State  Insurance  fund  now  amounts  to  about  $400,000.00  con- 
tributed by  approximately  5,000  establishments  grouped  by  the  law  into  47  classes 
of  "compulsory  associations"  according  to  similar  trades  and  hazards.  Out  of 
this  fund  there  has  been  disbursed  to  date  less  than  $15,000.00.  That  the  law 
and  the  policy  and  practices  of  this  commission  are  approved  by  the  beneficiaries 
is  best  evidenced  by  a  circular  letter  issued  to  all  locals  by  the  Washington  State 
Federation  of  Labor  urging  the  closest  co-operation  on  all  working  people. 

The  sole  basis  for  the  untrue  statement  above  quoted  is  that  our  class  46, 
Powder  Works,  embraces  only  four  establishments  in  this  State,  all  small  except 
that  of  the  DuPont  Company  commonly  known  as  the  Powder  Trust.  The  small 
plants  contributed  to  the  accident  fund,  the  large  plant  proposes  to  test  in  the 


126  CANADIAN"  MANUFACTURERS'  ASSOCIATION":  No.  65 

Federal  Courts  the  constitutionality  of  out  law  which  was  unanimously  sustained 
by  our  State  Supreme  Court,  Sept.  27th,  1911.  An  explosion  in  one  of  the 
small  plants  resulted  in  the  loss  of  eight  young  girls  who  had  been  permitted  to 
work  in  the  same  room  in  close  proximity  to  large  stores  of  powder.  The  fund 
is  sufficient  for  the  payment  of  the  pension  provided  by  law  to  the  parents  of  these 
girls  for  a  considerable  period,  but  until  the  very  large  powder  company  con- 
tributes its  quota,  the  setting  aside  of  the  reserve  to  the  parents  of  those  children 
required  by  law  must  be  deferred. 

Eespecting  the  filing  of  numerous  trivial  reports,  that  statement  is  correct 
since  our  law  requires  the  employer  to  report  "any  accident,"  and  with  the  begin- 
ning of  its  operation,  October  1st,  the  employers  were  endeavouring  to  comply 
heartily  in  every  detail.  However,  notwithstanding  the  unfortunate  fact  that 
there  is  no  "first  aid  fund"  (same  having  been  stricken  out  in  the  legislature),  the 
Commission  does  not  compensate  for  any  injury  unless  actually  compelling  the 
workingman  to  abandon  his  job  for  a  period  which  results  in  the  loss  of  more  thaD 
5  per  cent,  of  his  monthly  wage. 

The  employers  of  the  State  are  almost  unanimously  in  hearty  accord  with  this 
law  and  its  present  administration.  They  have  learned  that  while  the  rates  fixed 
by  the  legislature  are  unquestionably  higher  than  casualty  companies  have  insured 
them  for  heretofore,  yet  those  rates  were  contributed  only  a  three  month's  payroll, 
and  no  more  payments  are  to  be  made  to  any  of  the  47  funds  except  such  fund  be 
first  reasonably  drained  by  the  accidents  of  that  class;  in  other  words,  they  are 
assessed  on  the  pay-rolls  at  the  rate  named  only  occasionally  as  necessary. 

Furthermore,  they  appreciate  that  while  casualty  companies  insured  them 
against  legal  liability  which  applied  to  about  fifteen  per  cent,  of  the  accidents, 
this  law  compensates  the  workmen  in  about  100  per  cent,  of  work  accidents  with- 
out regard  to  fault.  In  the  face  of  this,  we  believe  it  will  be  demonstrated  that 
the  actual  rates  which  can  only  be  determined  after  a  year  or  two,  will  in  fact,  be 
less  than  their  outlay  heretofore,  without  considering  their  loss  of  time  and  inci- 
dental expenses  incident  to  the  litigation  system. 

Yours  respectfully, 

The  Industrial  Insurance  Commission,  per. 


APPENDIX  X. 
LETTER  FROM  LARSON  LUMBER  CO. 

Seattle,  Wash.,  Nov.  17th,  1911. 

Mi:.  R.  TT.  If.  Alexander, 

Secretary,  British  Columbia  Branch  Canadian  Manufacturers'  Association. 
441  Seymour  Street,  Van6ouver,  B.C. 

Dear  Sir, 

In  response  to  yours  of  Nov.  13th,  I  desire  to  say  that  the  workings  of  the 
Workmen's  Compensation  Act  in  this  State  during  the  six  weeks  of  its  trial  so 
far  have  been  eminently  satisfactory.       Of  course,  this  is  altogether  too  short  a 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  127 

time  to  form  a  comprehensive  conclusion.  From  the  viewpoint  of  the  employer, 
however,  I  have  preferred  to  carry  my  individual  risk  in  the  past.  Our  company 
did  not  carry  liability  insurance  for  some  time,  but  we  set  aside  one  per  cent, 
of  the  pay  rolls  to  cover  sums  paid  to  injured  workmen.  We  endeavoured  to  pay 
all  employees  some  compensation,  whether  we  were  liable  or  not  and  I  have  found 
in  the  course  of  several  years'  experience,  that  one  per  cent,  of  the  pay  rolls  cover- 
ing the  mills  and  camps  was  sufficient  to  pay  ordinary  losses.  There  is  a  feature 
of  extraordinary  losses  staring  one  in  the  face,  however.  The  compensation  Act 
protects  the  individual  against  any  extraordinary  heavy  loss  such  as  might  arise 
from  the  bursting  of  a  boiler  for  example. 

On  account  of  my  previous  experience,  as  outlined  above,  I  was  somewhat 
opposed  to  the  State's  Compensation  Act,  as  their  charge  contemplated  a  cost 
of  two  and  one-half  per  cent,  on  the  payroll.  However,  we  were  able  to  get  an 
amendment,  which  made  the  two  and  a  half  per  cent,  an  advance  and  made  the 
subsequent  assessment  cover  only  actual  losses  paid. 

Answering  Mr.  Wegenast's  question  as  to  whether  the  system  is  preferable 
from  an  employer's  standpoint  to  the  common  law  system  of  the  alternate  of  the  in- 
dividual liability ;  I  am  inclined  to  the  belief  that  it  is  vastly  superior  to  the  old  com- 
mon law,  especially  as  it  has  been  practised  in  the  Western  States,  and  I  believe 
on  account  of  the  liability  of  extra  hazard  it  is  preferable  to  the  individual  liability 
of  employers.  Of  course,  as  I  said,  all  is  in  the  nature  of  an  experiment,  being 
somewhat  more  advanced  and  socialistic  than  any  other  in  existence.  I  opposed 
it  in  the  beginning  as  stated  above,  but  am  now  convinced  that  law  can  generally 
be  administered  to  the  satisfaction  of  employers  and  to  the  relief  of  employees, 
whereas  before  very  little  of  the  actual  money  paid  reached  the  injured  party. 
I  trust  that  this  answers  your  questions.     With  personal  regards,  I  remain, 


Very  truly  yours, 


J.  W.  Bloedel. 


APPENDIX  XI. 
INDUSTRIAL  INSURANCE  COMMISSION. 

Statement  of  Funds  in  Classes  7,  10,  and  29,  on  January  15th,  1912,  per. 

The  three  classes  created  by  the  Industrial  Insurance  Commission  under  the 
Workmen's  Compensation  Act  in  which  we  are  particularly  interested  are  classes 
7,  10,  and  29.  Through  the  courtesy  of  the  Commission  we  have  secured  the 
figures  showing  the  status  of  the  fund  in  these  classes  at  the  'close  of  business  on 
January  15  th. 

We  have  been  promised  these  same  figures  every  month  in  time  for  publication 
in  the  bulletin  and  we  would  advise  members  to  file  copies  and  compare  the 
figures  from  month  to  month.  It  is  of  great  importance  that  we  watch  this 
matter  carefully.  If  it  is  found  that  the  fund  is  decreasing  and  that  the  receipts 
on  the  present  rate  are  not  going  to  be  enough  to  meet  the  claims  decided  by  the 
commission  to  be  justified,  then  one  of  two  things  must  happen — either  the  rate 
will  have  to  be  raised  or  the  number  of  accidents  must  be  cut  down.  Needless  to 
say  we  will  strive  for  the  latter. 


128  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


It  is  also  true  that  with  reduction  in  the  number  of  accidents  the  rate  will 
be  reduced  and  to  that  end  we  should  bend  every  effort. 

Class  7.     Including  Construction  and  Operation  of  Steam 

and  Logging  Eailroads. 

Number  of  contributions,  147 ;  amount  paid  in  $26,308  42 

Number  of  claims  paid,  24;  amount  paid  on  claims   2,888  00 

Balance  in  Fund    $23,420  42 

Class  10.     Including  Lumbering  and  Milling. 

Number  of  contributions,  728;  total  amount  paid  in $148,017  53 

Number  of  claims  paid,  349 ;  amount  paid  on  claims  17,030  33 

Balance   in   Fund    $130,987  20 

Class  29.     Including  Planing  .Mills,  Sash  and  Doors,  etc. 

Number  of  contributions,  242;   total  amount  paid  in   $15,596  77 

Number  of  claims  paid,  23;  amount  paid  on  claims  1,907  85 

Balance  in   Fund    $13,688'  92 

A  number  of  claims  are  now  being  investigated  and  others  are  in  process  of 
entry,  which  will  considerably  increase  the  payment  on  account  of  accidents  which 
have  occurred  during  October,  November  and  December. 


APPENDIX  XII. 
DE.  FKIEDENSBURG'S  PAMPHLET. 

Some  newspaper  attention  has  recently  been  attracted  by  a  pamphlet1  in 
which  certain  features  of  the  German  system  of  workman's  insurance  are  adversely 
criticised.  The  pamphlet  is  the  work  of  Dr.  Ferdinand  Friedensburg,  a  retired 
member  of  the  governing  body  of  the  Imperial  Insurance  Department  of  Germany. 

The  pamphlet  is  remarkable  if  for  no  other  reason,  because  it  is  the  one 
dissenting  voice  in  the  chorus  of  the  sometimes  extravagant  praise  of  the  German 
insurance  system.  Dr.  Friedensburg  was  originally  appointed  on  the  Senate  of 
the  Insurance  Office  as  representative  of  the  ultra-conservative  element  who  were 
opposed  on  principle  to  the  social  insurance  schemes;  and  he  has,  it  appears, 
throughout  his  tenure  of  office  maintained  an  attitude  of  critical  dubiousness. 
The  whole  tone  of  the  pamphlet  though  it  undoubtedly  contains  much  that  is 
cogent  and  valuable,  is  one  of  caustic  sarcasm  not  indicative  of  an  unbiased  dis- 
position. It  is  in  places  marked  by  exaggeration  and  distortion  of  facts,  bordering 
upon  disingenuousness  and  appears  to  carry  much  less  weight  in  the  country  of 
its  origin  than  has  been  attributed  to  it  by  foreign  reviewers. 

The  criticisms  arc  of  course  not  confined  to  the  accident  compensation  system 
but  apply  to  the  whole  German  system  of  social  insurance  against  accident,  sickness 

'Praxis  der  deutschen  Arbeiterversicherung   (Berlin,  1911).     Translation  by  Louis 
H.  Gray,  Workmen's  Compensation  and  Information  Bureau,  New  York. 


1912  WORKMK.VS  COMPENSATION  COMMISSION.  129 

and  old  age,  with  particular  reference  to  the  first  two.  Some  of  the  criticisms 
referred  to  will  therefore  be  found  wholly  or  partially  inapplicable  to  the  accident 
compensation  phase  of  the  subject. 

It  is  difficult  to  analyse  Dr.  Friedensburg's  strictures  into  specific  counts, 
but  at  the  risk  of  imputing  a  definiteness  which  is  wanting  in  the  article  itself, 
the  following  items  may  be  extracted.  It  is  said  that  the  original  object  and 
intention  of  the  system  as  expressed  in  the  Imperial  message  establishing  it,  namely: 
to  "Consolidate  the  economic  forces  of  the  nation  by  means  of  industrial  associa- 
tion under  state  supervision''  has  not  been  realized  in  result.1  On  the  contrary, 
it  is  intimated  that  the  economic  burdens  imposed  by  the  system  tend  to  handicap 
German  industry  and  commerce  in  its  competition  in  the  markets  of  the  world.2 
The  fear  is  expressed  that  in  time  of  war  or  depression  the  burden  of  insurance 
may  become  ruinous.8  The  trade  associations  are  said  in  some  cases  to  be  in  a 
precarious  financial  footing  not  maintaining  adequate  reserves.  The  administration 
of  the  system  is  said  to  engage  an  unduly  large  official  staff  and  to  involve  an 
undue  amount  of  clerical  labour.  The  system  is  said  to  encourage  litigation  and 
to  involve  an  execessive  number  of  appeals.  The  chief  complaint  is  against  the 
spirit  in  which  the  system  has  been  administered,  and  this'  complaint  sums  up 
and  includes  most  of  the  others.  It  is  asserted  that  in  the  effort  to  popularize  the 
system  and  to  placate  the  working  classes  the  legal  or  juristic  conception  originally 
intended  to  be  embodied  in  the  system  has  been  lost  sight  of.  Those  in  charge 
di  the  administration  are  said  to  have  shown  too  great  solicitude  on  behalf  of 
the  claimants  of  benefits.  Judicial  officers  have  combined  the  functions  to  judge 
and  advocate  and  are  influenced  by  benevolent  and  philanthropic  sentiments  rather 
than  by  principles  of  justice.  Humanitarian  appeals  in  individual  cases  weighed 
strongly  against  broader  considerations  of  equity  and  economy.  Individual  en- 
croachments are  seized  upon  as  precedents  for  general  extension  of  pension  rights ; 
as  a  result,  it  is  said  that  simulation,  malingering,  fraud  and  perjury  have  become 
so  common  as  to  demoralize  the  whole  administration  and  the  effect  has  been  to 
pauperize  the  working  population  and  to  stifle  thrift  and  enterprise. 

In  many  particulars,  the  criticisms  are  inconsistent  and  self-contradictory. 
in  other  particulars  they  are  manifestly  untenable  in  the  light  of  general  know- 
ledge. While  it  is  deplored  in  one  place  that  the  benevolent  attitude  of  the  courts 
has  made  it  almost  impossible  for  a  workman  to  fail  in  establishing  his  claim 
in  another  place  figures  are  cited  showing  that  of  the  total  number  of  claims  only 
18.7  are  granted  on  application,  and  of  the  applications  for  revision  in  unsuccessful 
cases  only  10.5  per  cent,  succeed.4  Again  Dr.  Friedensburg  expresses  alarm  at 
the  growth  of  paternalism  and  bureaucracy  while  at  the  same  time  advocating  the 
complete  assumption  by  the  State  of  the  whole  administration  of  the  insurance 
system  and  the  collection  of  the  insurance  fund  through  the  medium  of  the  state 
fiscal  machinery.  He  admits  that  it  was  the  intention  that  the  State  should  make 
provision  (staatliche  Fursorge)  for  workers  who,  through  sickness,  industrial 
accident,  invalidity  or  old  age,  have  become  incapacitated,5  and  that  the  system 
was  freed  from  all  legial  formalities  and  red  tape":  yet  he  inveighs  bitterly  against 
the  departure  from   the   "juristic"''  conception   of  the  insurance  of  the   insurance 

1  P.  9   (Gray,  24). 

2  P.  5    (Grav,  19). 

3  P.  6  (Gray,  20). 

4  P.  38  (Gray,  51). 

5  P.  1   (Gray,  15). 

6  P.  3   (Gray,  17). 
9   L. 


130  CANADIAN"  MANUFACTURERS'  ASSOCIATION:  No.  65 


system  and  the  informality  of  proceedings  by  which  claims  are  established.  The 
argument  that  insurance  systems  have  militated  against  the  success  of  German 
industry  and  commerce  is  refuted  by  the  consensus  of  opinion  amongst  expert 
authorities  in  Germany  and  in  foreign  countries.  This  opinion  is  well  expressed 
by  Dr.  Kaufman,  President  of  the  Imperial  Insurance  Office.  "The  workers' 
lives  preserved  mean  maintenance  and  increase  of  our  national  resources,  and 
therefore  give  splendid  returns  for  the  heavy  financial  burdens  which  social  insur- 
ance places  upon  economic  structure.  It  is  not  an  accident  that  the  unprecedented 
expansion  of  German  commerce  and  industry  and  tbe  wonderful  improvement  in 
the  economic  welfare  of  the  nation  during  the  last  twenty  years  has  happened 
concurrently  with  thorough-going  improvement  in  the  condition  of  our  workers. 
There  is  a  close  connection  between  the  two  events."1 

The  figures  given  by  Dr.  Friedensburg  as  to  the  number  of  officials  engaged 
upon  tbe  system  do  not  appear  in  the  light  of  the  population  of  Germany  and  the  ex- 
tent of  the  system  to  represent  an  excessively  large  administrative  staff,  and,  it  may 
be  added,  that  with  the  exception  of  the  more  fully  developed   State's  scheme 
suggested  by  Dr.  Friedensburg  himself,  no  other  system  of  insurance  would  afford 
any  superiority  in  this  respect.       Notwithstanding  Dr.   Friedensburg's  criticisms 
insurance  administration  in  Germany  is  admittedly  the  most  efficient  and  econ- 
omical known  in  the  world. 

As  to  the  solvency  of  the  trade  associations  it  must  be  remembered  that  under 
the  German,  system  it  is  not  necessary  to  set  up  reserves,  but  is  sufficient  to  collect 
each  year  only  enough  to  pay  the  year's  pensions  with  a  small  margin  for  an 
emergency  fund.  As  a  matter  of  fact,  it  has  been  strongly  protested  that  tbe 
margin  regularly  added  to  the  amount  required  for  the  year's  outlay  has  been 
too  large.  The  accumulated  reserves  had  in  1909  reached  the  immense  sum  of 
$540,000.00.2 . 

In  their  general  character  the  criticisms  are  anything  but  constructive  and 
little  or  no  attempt  is  made  to  point  out  remedies  or  alternatives :  but  a  few  con- 
structive suggestions  are  made,  and  these,  in  the  light  of  the  general  tenor  of 
the  pamphlet  are  of  a  surprising  character.  The  conclusion  of  the  whole  argu- 
ment is  given  in  the  following  remarkable  passage.  "Tbe  system  of  workmen's 
insurance  cannot  be  fully  beneficial  until,  freed  from  all  exaggeration,  and  in 
particular  from  conscious  or  unconscious  subservience  to  tbe  lower  elements,  it 
operates  as  a  state  institution  unpartisan,  as  any  other  department  of  the  state."3 
In  another  portion  of  the  pamphlet  he  suggests  that  "A  tax  might  have  been  levied 
far  more  cheaply  nor  would  it  have  required  the  huge  army  of  officials  the  intricate 
mechanism  of  administration  or  the  costly  system  of  vouchers  and  the  like."4 

But  while  there  is  little  constructive  criticism  the  writer  is  at  pains  to  disavow 
opposition  to  the  essential  principles  of  the  German  system.  Thus  he  states  that 
it  is  far  from  his  intention  to  say  anything  in  opposition  to  the  German  social 
insurance  legislation  or  its  development.5  Again,  he  says:  "This  does  not  imply 
that  the  Trade  Associations  should  be  abolished.     That  would  be  the  most  serious 

1  Schwedtman  and  Emery,  Accident  Prevention  and  Relief,  page  38,  and  eee  similar 
expressions,  Resp.  Fed.  Com.  U.S-. 

'Schwedtman  and  Emery,  Accident  Prevention  and  Relief,  pp.  38.  41. 

8  P.  48  (Gray,  62).  It  is  difficult  to  translate  the  force  of  the  original:  "Die  Arbeiter- 
versicherung  kann  nur  dann  segensreich  wirken,  wenn  sie,  losgellost  von  alien  ubertrie- 
bungen,  insbesondere  von  der  bewuszten  Oder  unbewuszten  Liebedienerel  nach  unten,  als 
eine  Staatsf  inrichtung  arbeitet,  parteilos  wie  jede  andere." 

4  P.  41  (Gray.  54  I. 

BP.  6   (Gray,  201. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  131 


mistake  that  could  be  made  for  if  anything  has  stood  the  test  it  has  been  the 
Trades  Associations;  and  they  are  indispensable  as  constituting  the  most  effective 
means  of  representation  for  that  portion  of  the  community  which,  notwithstanding 
the  facility  which  their  opponents  display  in  manipulating  their  figures,  bears 
by  far  the  greatest  portion  of  the  cost  of  the  insurance."1  Even  in  the  title  of 
his  pamphlet,  Dr.  Friedensburg  guards  himself  by  announcing  his  subject  as 
the  "praxis"  as  opposed  to  the  theory  or  principles  of  the  German  system  of 
insurance.2  And  this  altitude  is  borne  out  in  the  discussion  which  is  almost 
entirely  a  deprecation  of  the  miscarriage  of  the  original  juristic  conception  which  the 
law  was  intended  to  embody.  The  complaint  is  not  against  the  law  or  the  system 
hut  against  the  alleged  compliant,  class-serving  and  paternalistic  spirit  shown  in 
its  administration. 

The  chief  and  perhaps  the  only  value  of  the  article  consists  in  its  calling 
attention  in  an  emphatic  if  hyberbolic  manner  to  the  dangers  of  allowing  the 
administration  of  an  insurance  system  to  be  controlled  by  short  sighted  human- 
itarian and  charitable  sentiments.     This  may  be  evinced  not  only  in  the  benevolent 
allowance  of  claims  not  strictly  justified,  but  also  by  charitably  relieving  the  work- 
men from  participation  in  the  cost.     For  Dr.  Friedensburg  does  not  confine  his 
criticisms  to  the  official  and  the  workman.     "Insurance  was  intended  as  a  right 
which   the  insured  was  to  help  secure  by  his  own  efforts;  in  this  way  he  was 
to  be  won  to  a  participation  in  the  thought  and  activity  of  the  nation ;  he  was 
to  learn  not  to  rely  upon  the  help  of  others  but  rather  to  work  out  his  destiny 
by  his  own  efforts.       With  deliberate  and  well-considered  purpose,  therefore,  the 
original  draft  of  the  sickness  insurance  law  made  it  the  duty  of  the  employer  to 
deduct  half  of  his  contribution  to  the  insurance  fund  from  the  wages  of  the  work- 
men.    But  in  this  instance  it  was  the  Reichstag  itself,  which,  unable  to  do  enough 
in  its  benignity  and  its  craving  for  popularity  changed  the  obligation  into  a  mere 
authorization  which  to  a  large  extent,  has  remained  a  dead  letter.     Of  course, 
the  concept  itself  is  not  yet  quite  dead.     Only  recently,  the  Chamber  of  Commerce 
at  Frankfort-on-the-Oder  opposing  a  projected  insurance  law  for  private  official-, 
has  placed   itself   on   record   that:    'The   assumption   by   the   State   of  too  large   a 
responsibility  in  providing  for  its  citizens  involves  the  grave  danger  that  individual 
responsibility,  that  powerful  incentive  to  thrift  and  enterprise,  may  become  gradu- 
ally  atrophied.'"'3     And   of   employers   themselves   the  complaint   is   that  "it   has 
long  since  become  the  regular  custom  for  masters — and  their  example   has  been 
followed  by  many  other  employers,  especially  in  rural  districts — to  pay  the  full 
contributions  towards  the  invalidity  insurance  of  their  insurance ;  and  not  to  sub- 
tract the  half  as  they  may  optionally  do.     Many  indeed  know  of  no  other  course; 
and  many  would  even  he  ashamed  to  do  it."4 

Much  more  remarkable  than  the  article  itself  is  the  attempt  of  the  advocates 
of  the  system  of  individual  employers'  liability  with  voluntary  insurance  to  use 
the  pamphlet  in  support  of  their  views,  and  as  an  expose  of  the  weakness  of 
state  insurance.  The  article  is  being  quoted  by  representatives  of  the  liability 
insurance  interests  in  opposing  the  idea  of  state  insurance.  Used  for  this  pur- 
pose the  article  is  certainly  a  boomerang.  In  the  first  place,  the  German  system 
of  accident  compensation  is  not  a  State  insurance  system,  and  in  the  second  place, 
as  has  been  pointed   out,   the   strongest   argument   contained    in    the   article   is   a 

■P.  47   (Gray.  61). 

aDr.  Gray  has  mistranslated  this  as  "Practical  Results." 

3  P.  41    (Gray,  54). 

4  P.  40  (Grav.  54). 


132  CANADIAN  MANUFACTURERS'  ASSOCIATION:  No.  65 


plea  for  state  insurance.  Moreover,  Dr.  Friedensburg  is  most  emphatic  in  disclaim- 
ing dissent  from  the  underlying  principles  of  the  German  system.  He  intimates 
that  he  would  be  a  "blind  fool"  who  would  "fail  to  recognize  that  the  blessings  of 
the  insurance  system  cannot  be  fully  described  even  by  the  use  of  the  customary 
expressions  of  unqualified  laudation."1 

The  following  letter  by  Dr.  Zacher,  the  recognized  authority  on  the  German 
insurance  system,  is  quoted  from  the  brief  presented  to  the  Federal  Commission 
on  Workmen's  Compensation  by  Mr.  Ferdinand  ('.  Schweidtmao,  on  behalf  of  the 
National  Association  of  Manufacturers  of  the  United  States,  and  probably  repre- 
sents with  fair  accuracy  the  views  of  those  best  in  a  position  to  estimate  the  force 
of  Dr.  Friedensburg's  criticism: 

Berlin,  April  19th.  1911. 
My  dear  Mr.  Schwedtman, 

In  reply  to  your  favours  of  March  31st,  and  April  7th,  I  beg  to  send  you 
herewith  the  desired  particulars  of  Dr.  Friedensburg.  His  statement  must  not 
be  taken  too  serious.  Dr.  Friedensburg  has  been  generally  known  even  during 
his  active  connection  with  the  Imperial  Insurance  Department  as  the  solitary 
advocate  of  extreme  tendencies.  His  present  articles  show  an  unwarranted  ten- 
dency to  condemn  a  great  national,  social  insurance  system  on  account  of  a  few 
shortcomings  in  some  of  its  details.  That  any  system,  covering  by  compulsion 
nearly  all  of  the  working  population  of  a  nation,  has  some  fault,  especially  at 
the  beginning,  is  natural,  and  I  have  long  ago  called  attention  to  them  in  my 
works  on  social  insurance  but  have  at  the  same  time  pointed  out  their  remedies. 

While  I  have  the  highest  regard  for  the  sense  of  justice  and  fairness  of  Dr. 
Friedensburg.  who  for  many  years  was  my  associate  in  office;  I  know  that  there  is 
no  foundation  for  his  accusation  on  the  part  of  the  German  Imperial  Department 
in  favour  of  the  wage  workers.  The  labour  press  has  in  recent  years  with  equal 
lack  of  reason  accused  this  department  of  the  opposite  tendency — that  is,  of 
injustice  to  the  wage-worker. 

Surely  there  can  be  no  reasonable  talk  of  a  deficit  actuarial  or  otherwise,  or  of 
financial  difficulties  in  our  insurance  system,  in  view  of  an  accumulated  reserve 
\'wi\<\  of  $500,000,000,  especially  if  our  insurance  laws  continue  to  be  carried  out 
properly,  and  every  abuse  continues  to  be  promptly  and  effectually  met.  I  am 
of  the  opinion  that  a  compulsory  national  insurance  system  does  not  require  the 
complicated  method  of  figuring  in  advance  exact  final  costs  which  of  course  must 
be  part  of  a  voluntary  insurance  system,  but  remains  always  a  factor  of  uncertainty. 
Men  sufficiently  familiar  with  this  subject  to  judge  are  unanimous  in  pro- 
nouncing the  underlying  principles  of  the  German  insurance  system  thoroughly 
sound,  and  in  declaring  the  system  a  wonderful  factor  in  establishing  for  the  whole 
nation  a  higher  level  in  culture  and  industrial  efficiency.  Practically  every  one 
agrees  that  the  shortcomings  of  our  insurance  system  are  extremely  small  in 
comparison  with  its  wonderful  advantages  and  especially  in  the  compulsory  feature 
responsible  for  a  growing  spirit  of  thrift  and  economy  which  is  full  of  importance 
and  promise  for  the  future  of  the  nation. 

Wishing    the    National    Association    of    Manufacturers    a    successful    annual 

convention,   1    remain. 

Sincerely  yours,  Dr.  Zacher. 

Director  German  Imperial  Statistical  Department. 


P.  48   (Gray,  ©0). 


MINUTES  OF  EVIDENCE 


First  to  the  Eleventh  Sitting, 


OCTOBER    23,    1911    TO    JANUARY    24,    1912. 


133 


MINUTES  OF  EVIDENCE 

Taken  before  the  Commissioner 
THE  HON.  SIR  WILLIAM  RALPH  MEREDITH,  CJ.,C.P. 

O  N 

Workmen's  Compensation 


FIRST  SITTING 


Legislative  Building,  Toronto. 

Monday,  23rd  October,  1911,  11  a.m. 

Present  :     Sir  William  R.  Meredith.,  Commissioner. 
Mr.  F.  N".  Kennin,  Secretary. 
Mr.  W.  B.  Wilkinson,  Law  Clerk. 

The  Secretary  read  the  Commission  appointing  Sir  William  Ralph  Meredith, 
C.J.jC.P.,  Commissioner. 

The  Commissioner:  Since  the  issue  of  this  Commission  efforts  have  been 
made  to  get  together  as  much  material  as  possible  bearing  upon  the  subject  of  the 
inquiry,  and  the  Secretary  has  gathered  a  very  large  amount  of  what  may  turn  out 
to  be  valuable  information  upon  the  subject.  That  information  will  be  here,  and 
will  be  available  to  anybody  who  may  wish  to  examine  it  or  to  make  any  use  of  it. 
It  will  not  be  praticable  to  take  it  away  unless  there  are  duplicate  copies,  but  any 
of  it  may  be  examined  at  any  time  by  any  person  interested.  It  was  intended  that 
the  public  sittings  of  the  Commission  should  take  place  earlier,  but  owing  to 
circumstances  to  which  it  is  not  necessary  to  refer  more  particularly,  it  was  thought 
inexpedient  to  hold  a  sitting  of  the  Commission  until  the  present  time.  Although 
this  sitting  of  the  Commission  is  preliminary,  I  will  be  glad  to  hear  to-day  what 
anyone  has  to  say.  and  ;is  for  any  and  all  other  persons  who  may  wish  to  speak 
upon  the  subject  of  the  inquiry,  arrangements  may  be  made  at  convenient  times. 

If  there  is  anyone  present  who  wishes  to  be  heard  he  may  speak  now. 

Mr.  E.  C.  Hunt  :  Last  year  I  lost  my  right  arm  in  a  sawmill  in  Cookstown, 
and  I  received  no  compensation  whatever  for  my  loss.  My  wages  stopped  as  soon 
as  my  arm  was  cut  off,  and  I  had  to  make  what  provision  I  could  to  enable  me  to 
get  better.  Since  getting  better  and  getting  an  artificial  arm  I  have  had  great 
trouble  in  getting  employment  of  any  description.  It  is  very  hard  for  a  man  with 
one  arm  to  get  a  job  when  very  often  there  is  an  over  plus  on  the  market  of  men 
with  two  arms. 

[1341 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  135 

The  Commissioner  :     Was  any  effort  made  to  obtain  compensation  ? 

Mr.  Hunt  :  I  asked  the  man  and  he  said  he  wasn't  worth  very  much.  I  saw 
a  lawyer  about  the  case  and  he  claimed  he  didn't  think  it  was  worth  my  while  to 
sue,  for  the  man  wasn't  worth  very  much  that  I  was  working  for,  and  he  didn't  see 
that  there  was  any  defect  in  the  machinery,  and  he  thought  in  the  long  run  I  should 
be  the  loser  if  I  took  action.  He  said  the  best  thing  to  do  was  to  let  it  go,  and  that 
is  all  I  got,  and  I  have  just  had  to  struggle  along  as  best  I  could  with  the  one  arm. 
I  think  some  compensation  should  be  made  either  of  a  grant  of  land  or  a  pension 
such  as  is  in  effect  in  Australia  or  in  some  of  the  States  or  in  the  British  Isles.  If 
this  had  occurred  in  the  British  Isles  I  should  have  got  enough  to  live  on  for  the 
remainder  of  my  life  on  account  of  the  injury.  I  think  a  man  that  gets  hurt  in  the 
industrial  army  should  be  compensated  in  some  way  similarly  to  a  man  that  is 
injured  in  warfare.     I  think  that  is  all  I  have  to  say. 

Mr.  A.  C  Macdonell,  K.C :'  Permit  me  to  say  a  word  or  two.  I  was  not 
aware  of  what  the  inquiry  would  be,  but  I  am  glad  to  have  an  opportunity  to  say 
just  a  few  words  on  the  subject.  It  seems  to  me  as  the  law  is  at  present  on  our 
statute  books,  and  as  administered,  certainly  in  the  opinion  of  many,  it  is  entirely 
inadequate  and  out  of  date  with  our  present  civilization.  The  condition  is  such 
that  it  has  become  more  than  an  abuse,  in  my  opinion,  because  of  the  presence  of 
what  are  called  liability  insurance  companies.  In  the  first  place  when  a  man 
meets  with  an  accident  now  he  has  the  general  law,  the  Workmen's  Compensation 
for  Injuries  Act.  which  has  been  productive  of  perhaps  more  litigation,  as  your 
Lordship  is  aware,  than  any  other  act  on  the  statute  book.  The  result  has  been 
that  almost  numberless  cases  have  gone  from  court  to  court  on  practically  every 
section  of  that  act.  It  has  not  proved  to  be  a  remedial  act  in  so  far  as  the  public 
are  concerned.  It  is  not  a  measure  out  of  which  the  public  has  had  any  very  great 
advantage.  In  the  second  place  the  presence  of  these  insurance  companies  makes 
it  practically  impossible  for  a  man  to  recover  damages  for  an  accident.  Now,  when 
I  say  practically  impossible  I  mean  that  in  its  fullest  sense.  In  the  first  place  all 
employers  are  insured,  generally  speaking,  by  these  companies,  and  they  are  per- 
fectly indifferent  as  to  what  becomes  of  the  accident  after  it  happens.  The  insur- 
ance company  takes  over  all  responsibility  for  it  and  all  litigation  in  connection 
with  it.  The  result  is  that  as  soon  as  a  man  is  injured  an  agent  of  the  company 
practically  follows  him  in  the  ambulance,  either  to  his  home  or  to  the  hospital,  and 
obtains  from  him  fairly  or  unfairly — very  often  unfairly — some  kind  of  a  release; 
he  gets  the  company  released,  or  makes  some  settlement.  Very  often  these  settle- 
ments are  unfairly  obtained,  and  nearly  always  inprovident.  They  are  obtained  at 
a  time  when  the  injured  person  is  not  in  a  condition  to  look  after  his  own  affairs 
and  when  he  is  easily  taken  advantage  of.  The  result  is  that  litigation  ensues,  and 
these  settlements  are  very  often  set  aside,  and  very  often  stand;  but  in  any  case  no 
matter  what  the  accident  may  be  the  company  defends  it.  They  make  it  a  practice 
to  defend  everything,  and  the  result  is,  even  if  a  man  is  honestly  entitled  to  com- 
pensation, or  his  family  is  entitled  to  compensation,  litigation,  generally  prolonged, 
ensues  and  the  man  gets  nothing.  In  many  of  these  cases  a  legal  gentleman  is 
attached  to  the  staff  of  these  insurance  companies,  and  they  carry  on  litigation 
practically  at  no  expense  except  the  expense  of  an  annual  salary  of  a  small  nature 
to  the  lawyer  who  is  attached  to  the  staff,  and  justice  is  impeded  in  this  way. 
Appeals  are  taken  from  court  to  court,  and  almost  on  every  motion-  and  even  dur- 
ing the  pendency  of  litigation  again  the  agent  of  the  company  is  active.  Even 
months  after  matters  have  been  placed  in  solicitors'  hands  we  find  the  agents  going 
to  the  house  of  the  man  who  has  been  injured,  seeing  himself  or  his  wife,  and 


136  MINUTES  OF  EVIDENCE:  No.  65 

obtaining  settlements  that  are  improvident,  and  done  behind  the  back  of  the  legal 
adviser  of  the  unfortunate  person. 

I  think  public  opinion  generally  is  satisfied  that  this  litigation  is  not  in 
accordance  with  our  present  civilization,  and  that  some  change  should  take  place. 
What  that  change  shall  be  is.  of  course  a  matter  of  opinion.  We  find  magazine 
articles  almost  without  number  upon  the  legislation  in  the  different  countries,  and 
upon  what  legislation  probably  will  take  place  in  the  future  in  these  different 
countries.  Personally  I  think  the  present  British  Compensation  for  Workmen's 
Act  of  1906  is  about  as  reasonable  and  as  fair  a  measure  as  could  be  adopted. 
We  could  have,  if  we  adopted  that,  the  advantage  of  the  British  system  of  leg- 
islation, and  the  British  system  of  the  interpretation  of  the  act,  because  although 
the  act  is  pretty  definite  in  its  terms  still,  as  you  are  aware,  a  large  number  of 
cases  have  already  been  tried  and  taken  from  court  to  court  regarding  the  different 
features  of  that  act,  and  working  of  it  out. 

I  have  made  a  short  summary  of  the  salient  features  of  the  act,  the  outstand- 
ing features,  or  as  it  were  the  bones  of  the  act,  and  they  are  shortly  these: 

The  Workmen's  Compensation  Act  of  1906  is  an  act  to  consolidate  and  amend 
tie  law  with  lespect  to  compensation  to  workmen  for  injuries  suffered  in  the  course 
of  their  employment.  The  act  provides  generally  for  the  liability  of  employers  to 
workmen  for  injuries,  and  introduces  a  new  principle  into  the  English  law,  namely, 
that  one  man  may  be  made  responsible  to  another  for  injuries,  whether  or  not  there 
lias  been  any  negligenqe  on  his  part.     Broadly  speaking  the  effect  of  this  act  is 
that  every  workman  shall  be  entitled  to  recover  compensation  from  his  master  if  he 
is  injured  by  an  accident  whilst  employed  in  his  service,  and  this  is  quite  apart 
from  whether  such  accident  was  occasioned  by  the  master's  negligence  or  not.     The 
injury  must  have  been  occasioned  by  an  accident  while  in  his  employment,  but  it 
is  a  matter  of  indifference  whether  it  was  occasioned  by  the  master's  negligence  or 
not.        The   act  may  be  divided  under  three  principal  headings:   The   act  itself 
mainly  deals  with  the  question  of  the  liability  for  compensation;  the  First  Schedule 
deals  witli  how  the  compensation  is  to  be  assessed  and  disposed  of;  and  the  Second 
Schedule  deals  with  the  procedure  to  be  adopted.  This  procedure  is  new.  Along  with 
the  introduction  of  the  new  principle  of  liability  the  act  has  introduced  a  newT  prac- 
tice entirely,  that  of  arbitration.     I  would  briefly  indicate  the  chief  points  to  be 
observed  by  the  inspectors  and  the  workmen  in  ascertaining  and  determining  such 
liability.     To  establish  a  right  to  compensation,  whatever  the  amount,  the  applicant 
iiiii-t    prove:    (1)    that    he  was  in   an  employment    to  which   the  act  applies.        In 
England   thai    has  been  very  broadly  extended  to  include  seamen,  and   so   forth  : 
(2)    thai    he  was  injured  by  an  accident;   (3)   that  the  accident  arose  out  of  and 
in  the  course  of  his  employment  :   (  i)   that  he  was  a  workman  within  the  scope  of 
the  act;   (5)    that   he  was  entitled   to  some  earnings.  1   think  those  who  earn  over 
£250  a   pear  are  not  included   in  the  benefits  of  the  act,  that  is  the  equivalent  of 
$1,000:  (6)  that  he  was  incapacitated  by  such  accident  for  at  least  one  week;  (7) 
that    so   soon   as   possible   he  gave  notice  of  such   accident:    (8)    that   within  six 
months  he   inadi    a  claim   in   respect  thereof:    (9)   that  for  such  accident  the  res- 
pondents  (they  an    called   respondents  there  instead  of  defendants)    are  persons 
liable  within  the  act.     In  addition  to  controverting  the  evidence  of  the  applicant 
on  any  of  the  foregoing  points,  as  a  matter  of  defence  the  respondents,  provided 
they  have  given  the  proper  notice,  may  also  say:   (1)   that  the  accident  was  occa- 
sioned  by  the  serious  and   wilful   misconduct   of  their  workman  and  that  it  has  not 
resulted  in  death  or  serious  and  permanent  disablement;  (2)  as  regards  industrial 


1912  WOKKMEN'S  COMPENSATION   COMMISSION.  131 

duties  that  the  workman  had  at  the  time  of  entering  his  employment  wilfully  and 
fraudulent^  misrepresented  himself  in  writing  as  not  having  previously  suffered 
from  disease:  (3)  that  they  have  admitted  the  claim  and  there  is  no  subject  matter 
for  arbitration;  (  I)  thai  the  applicant  has  contracted  out  of  the  act,  that  is  in 
certain  eases  where  benefit  societies  or  funds  are  provided  in  lieu  of  the  compen- 
sation named  in  the  act;  (5)  thai  the  applicant  has  refused  to  submii  himself  to 
medical  examination.  Further  the  respondents  may  say,  although  not  as  againsl 
the  applicant,  that  through  liability  to  the  applicant  they  are  entitled  to  be  indem- 
nified by  some  other  person. 

These  are.  as  I  have  said,  the  salient  features  of  the  act  and  present  the  general 
Hl'eet  of  it.  In  England,  as  your  Lordship  is  aware,  this  act  has  been  commented 
upon  most  favourably.  The  result,  I  think,  has  been  that  in  England  and  in  other 
[daces  where  similar  legislation  exists  at  the  present  time,  that  the  employers  would 
on  no  account  part  with  the  act,  or  have  it  annulled  or  wiped  out.  It  has  heen 
found  that  the  act  is  beneficial  both  to  the  employer  and  employee.  It  rids  the 
employer  of  the  harassing  feature  of  law  suits  and  litigation,  and  the  amount  that 
the  employer  has  to  pay  for  damages  is  assessed  by  arbitration  on  a  scale  provided 
for  by  the  rules  stipulated  by  the  act.  Provision  is  made  now  by  all  employers 
for  the  annual  payment  of  certain  amounts  into  a  fund,  with  the  result  that  at  the 
piesent  time  the  employer  in  England  adds  to  his  charge  of  manufacture  and  to  the 
general  charge  of  his  null,  or  whatever  place  he  is  operating,  a  certain  annual  sum 
to  he  set  aside  to  form  a  fund  out  of  which  to  meet  claims  for  compensation.  This 
fund  is  carried  forward  the  same  as  any  other  fixed  or  permanent  charge  on  his 
business,  the  same  as  his  fire  insurance,  or  any  other  charge,  and  it  is  included  in 
the  cost  of  manufacture.  It  goes  into  his  fixed  charges  as  part  of  his  business.  It 
is  provided  for  and  paid  off  out  of  the  business  and  he  feels  no  sudden  call  upon  him 
for  moneys  to  meet  claims  of  this  kind,  because  he  has  already  provided  for  it  in 
the  way  I  have  said.  He  does  not  really  feel  the  annual  payments  any  more  than 
he  feels  his  taxes  or  fire  insurance,  or  any  other  fixed  charge  on  his  business,  and 
so  it  is  that  the  act  has  heen  found  beneficial  to  both  employer  and  employee.  It 
lids  the  employer  of  contentions  and  constant  litigation,  and  if  u'ives  the  employee 
a  chance,  without  expense,  to  go  before  a  tribunal  where  he  can  make  his  claim  in  a 
plain  simple  way  without  invoking  the  machinery  of  the  courts,  and  without  being 
obliged  to  give  up  half  of  what  he  may  recover  for  law  costs  even  if  he  does  recover. 
Nowadays,  as  I  have  said,  it  is  quite  impossible,  owing  to  the  intervention  of  the 
insurance  companies,  for  a  workman  to  get  what  he  is  entitled  to,  or  not  until  he 
Has  been  dragged  from  court  to  court,  and  what  he  gets  is  largely  dissipated  in 
law  costs. 

Mr.  Stewart:     That  refers  to  this  country? 

Mr.  Macdonell:  Yes.  The  manufacturer  over  there  now  includes  in  his 
cost  of  manufacture  a  certain  annual  sum  that  he  has  to  pay  into  this  fund  which 
goes  annually  to  make  up  a  sum  sufficient  to  meet  the  demands  of  the  workmen, 
and  he  does  not  feel  it  any  more  than  he  does  any  fixed  charges  or  overhead  charges, 
as  it  is  called,  in  his  business,  and  public  opinion,  as  far  as  it  has  been  expressed 
in  the  press  and  in  magazine  articles,  and  so  forth,  is  that  it  has  been  found  as 
advantageous  to  the  employer  as  to  the  employee. 

The  Oommisstoxft? :  How  do  you  find  the  act  operates  upon  small  employers 
of  labour,  say  a  man  employing  five  or  ten  men?  The  act  as  introduced  has 
exempted  that  class  of  manufacture  from  the  operation  of  the  act.  but  in  the 
House  that  exemption  was  stricken  out.  Have  you  looked  at  that  aspect  of  it,  Mr. 
Macdonell? 


138  MINUTES  OF  EVIDENCE:  No.  65 


Mr.  Macdonell:  I  have  not  observed  any  criticism  of  it.  From  the  stand- 
point of  the  small  emeployer  there  may  be  some  objections.  I  have  seen  a  great 
many  articles  in  periodicals  and  in  the  press,  but  I  have  not  observed  any  criticism. 

Mr.  D.  L.  McCarthy,  K.C.:  How  does  the  British  Act  apply  to  a  case  like 
Mr.  Hunt's? 

Mr.  Macdonell  :  That  is  liable  to  happen  anywhere.  The  law  cannot  guar- 
antee solvency  on  anybody's  part. 

The  Commissioner:  Have  you  seen  the  law  of  the  State  of  Washington, 
which  is  practically  State  insurance  at  the  expense  of  the  manufacturer? 

Mr.  Macdonell:     I  think  that  is  the  German  system  too. 

The  Commissioner:  But  this  is  entirely  at  the  expense  of  the  employer. 
That  was  passed  this  year. 

Mr.  Macdonell:  I  have  not  seen  that.  The  German  system  is  based  on  a 
contribution. 

The  Commissioner:  There  are  certain  percentages  of  the  total  wage  bill 
which  fix  the  contribution  by  the  employer  to  the  funds.  There  is  no.  risk  such  as 
Mr.  McCarthy  has  suggested  in  the  case  of  Mr.  Hunt.  There  the  fund  would  meet 
the  case. 

Mr.  Macdonell:     That  contribution  system  is  in  many  acts,  but  that  is  the 

first  act.  I  think,  in  which  it  is  entirely  at  the  expense  of  the  State. 

Mr.  Stewart  :  May  I  ask  Mr.  Macdonell,  since  he  has  mentioned  the  dangers 
of  insurance,  do  not  the  English  manufacturers  insure  on  the  same  basis  against 
accident  ? 

Mr.  Macdonell  :  Well,  they  don't  really  need  to  now.  I  don't  know  whether 
they  do  or  not.  Since  1906  the  Employers'  Liability  Act  guarantees  to  a  man 
injured  by  an  accident  certain  compensation. 

Mr.  Stewart:  Is  there  anything  in  the  British  Act  which  prevents  an 
employer  from  insuring  his  men  so  that  if  an  accident  does  happen  he  takes  no 
risk  whatever,  but  just  like  a  fire  insurance  company,  they  take  all  the  risk. 

Mr.  Macdonell  :     I  presume  they  do  that. 

Mr.  Stewart  :  Is  it  not  a  fact  in  England  that  through  the  operation  of  the 
insurance  companies  that  the  employers  have  to  differentiate  between  the  men  they 
employ,  and  that  men  who  are  above  the  age  of  33  and  become  a  little  disabled  are 
not  employed,  simply  for  the  reason  that  the  insurance  company  will  not  insure 
them  and  take  the  risk:  and  therefore  it  throws  the  older  and  weaker  workmen 
into  the  slough  of  despond,  into  the  scrap  heap?  Is  that  not  one  of  the  effects  of 
the  working  of  the  act  in  England? 

Mr.  Macdonell  :     That  would  follow  I  think  very  largely. 

Mr.  Stewart:  Wouldn't  it  be  a  benefit  to  a  few  of  the  workers  at  the  expense 
of  the  rest? 

Mit.  Macdonell:  That  is  if  you  introduce  the  insurance  part  of  it.  There 
is  no  necessity  for  that.  The  employer  is  made  liable  by  the  British  Act.  and 
therefore  it  is  a  matter  of  indifference  as  far  as  the  workman  is  concerned. 

Mr.  Stewart  :  You  do  not  state  that  the  employers  do  not  insure,  because  as 
a  matter  of  fact  they  do  insure  in  England. 

Mr.  Macdonell:  I  suppose  they  can,  but  that  does  not  affect  the  law.  The 
law  makes  the  employer  liable  for  an  accident  as  T  have  said  under  the  British 
Act. 

Mr.  Stewart:     Tt  affects  the  greater  portion  of  the  workers  though. 

Mr.  Macdonell:  I  do  not  know  how  that  would  work  out.  I  am  just 
discussing  the  legal  end  of  it. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  L39 

Tin-;  Commissioner:  The  point  that  Mr.  Stewart  has  mentioned  has  been 
prominently  brought  forward  in  the  discussion  on  these  acts,  and  it  was  pointed 
out  that  the  result  is  as  he  points  out,  although  the  age  is  put  a  good  deal  higher 
than  lie  mentioned.  It  is  said  that  employers  will  not  take  into  their  service  men 
over  fifty  as  they  are  more  liable  to  meet  with  accidents  and  it  is  perhaps  more  dif- 
ficult to  insure  them.  That  is  an  inherent  difficulty,  if  it  is  a  difficulty  at  all,  in 
the  system. 

Mr.  Macdoneli. :  There  could  be  legislation  that  would  remove  that  evil, 
perhaps. 

The  Commissioner:     You  have  no  suggestion  to  make  yourself,  Mr.  Stewart? 

Mr.  Stewart:  Well,  as  far  as  I  am  concerned  I  simply  say,  not  having  the 
mental  training  of  a  lawyer,  that  these  acts  kind  of  confuse  me,  but  from  the  work- 
ings of  the  British  Act  I  think  it  is  no  benefit  at  all  to  the  working  class,  as  far 
as  the  whole  working  class  is  concerned.  It  is  simply  the  few  who  get  compen- 
sated. It  simply  shifts  the  burden  from  a  few  of  the  working  class,  but  for  the 
majority  the  load  is  heavier,  for  the  reasons  I  have  put  forward;  in  the  first  place 
that  the  employer  has  certain  risks  to  take.  Naturally  in  his  business  he  has  the 
risk  of  fire,  and  he  has  the  risk  of  other  things  which  he  insures  against.  It  is  the 
same  with  the  workmen's  compensation.  A  man  is  injured  and  someone  has  got 
to  pay,  so  he  simply  insures  the  whole  staff.  Now,  the  insurance  companies  are 
not  in  business  for  pleasure;  they  are  in  business  for  a  profit;  and  the  old  man,  a 
man  who  from  working  perhaps  in  a  white  lead  industry  has  had  his  nerves 
shattered,  men  who  are  prematurely  old  from  the  nature  of  their  work, — are  the 
insurance  companies  going  to  insure  him  when  there  are  others  willing  to  sell  them- 
selves cheaper?  Certainly  not.  The  insurance  company  won't  take  the  risk.  The 
employer  also  is  in  business  for  profit,  and  naturally  the  older  men  are  put  on  the 
shelf.  It  is  only  one  in  a  thousand  that  gets  compensation.  A  few  of  the  workers 
are  benefited  by  the  British  Act,  but  the  majority  are  not.  It  is  an  act  for  the 
workers,  but  it  doesn't  redound  to  the  benefit  of  the  whole  of  the  workers.  It 
benefits  a  few  at  the  expense  of  the  others. 

The  Commissioner:     What  is  your  occupation,  Mr.  Stewart? 

Mr.  Stewart  :  I  have  no  occupation  regularly.  I  have  to  do  what  I  can.  but 
i  have  been  in  the  baking  trade.     I  have  learned  the  baking  trade. 

Mr.  F.  W.  Wegenast:  I  am  representing  the  Canadian  Manufacturers' 
Association.  I  presume  it  will  not  be  expected  at  this  preliminary  meeting  to  go 
into  any  detail  of  the  merits  in  this  discussion,  although  I  am  very  much  inter- 
ested in  certain  of  the  points  raised.  Incidentally  I  might  just  remark  that  there 
can  be  no  exception  taken  in  my  estimation  to  either  the  view  of  Mr.  Macdoneli, 
or  the  view  of  the  last  speaker  Mr.  Stewart,  so  far  as  they  go.  The  fact  of  the 
matter  is,  I  suppose,  that  under  the  British  system  there  is  insurance,  but  it  is  as 
has  been  indicated  an  employer's  liability  insurance,  and  the  insurance  company 
simply  takes  up  the  burden  of  defending  the  action,  such  as  it  may  be,  and  it  sees 
to  it  that  its  risks  are  no  heavier  than  it  can  possibly  help,  and  one  of  the  incidents 
of  that  system,  of  course,  is  that  the  older  and  more  decrepit  men  of  necessity  are 
gradually  pushed  to  the  wall.  On  behalf  of  the  Association  which  I  represent,  I 
would  like  to  present  the  resolution  which  was  adopted  at  the  annual  meeting  some 
weeks  ago,  and  to  say  in  connection  with  that  resolution  that  while  we  are  offering 
to  the  Commissioner  the  co-operation  of  the  Association  in  his  investigation,  we 
do  so  in  no  perfunctory  way.  The  manufacturers  of  this  Province,  and  indeed  the 
whole  Dominion,  are  seized  with  the  importance  of  this  subject,  and  if  I  may  antic- 
ipate the  attitude  that  will  probably  be  taken  by  the  manufacturers  and  probably 


140  MINUTES  OF  EVIDENCE:  No.  65 


ii  v  the  employee  -interests  in  tins  country,  I  would  say  that  probably  very  little 
exception  will  be  taken  to  the  proposition  of  Mr.  Macdonell,  that  compensation  in 
some  form  should  be  provided.  The  discussion,  if  I  may  anticipate  again,  so  far  as 
the  manufacturing  interests  are  concerned  at  all  events,  will  be  confined  probably 
to  tbe  means  by  which  that  compensation  should  be  effected.  Realizing  as  I  do 
that  the  question  of  what  is  the  best  means  is  a  matter  of  great  perplexity,  and  that 
in  determining  for  the  guidance  of  the  legislators  in  this  Province'  what  should  be 
the  proper  principles  to  work  upon,  we  have  the  advantage  of  the  experience  of  other 
countries  for  the  last  thirty  or  forty  years.  The  resolution  which  I  may  perhaps 
read  js  as  follows:  "Resolved  that  the  conservation  of  industrial  efficiency  by 
organized  and  systematic  means  for  the  protection  of  the  life  and  health  of  wage 
workers,  and  compensation  for  the  results  of  industrial  accidents  is  a  matter  which 
demands  the  careful  attention  of  this  Association. 

"  That  in  view  of  the  imminence  of  legislation  upon  the  subject  in  some  of  the 
provinces,  this  Association  ought  to  undertake  a  thorough  investigation  of  the 
whole  subject  of  accident  prevention  and  relief,  with  a  view  to  formulating  a  broad 
general  policy  for  future  activities. 

"  That  recognizing  the  futility  of  repeating  the  experiments  of  other  countries 
and  the  possibility  of  profiting  by  the  failure  and  success  of  legislation  of  other 
jurisdictions,  we  urge  upon  those  in  authority  that,  without  permitting  any  undue 
or  unreasonable  delay,  any  future  legislation  should  be  undertaken  only  after  the 
most  thorough  investigation  of  the  whole  subject  from  all  standpoints. 

"  That  a  committee  be  appointed  to  investigate  the  subject  on  behalf  of  this 
Association,  and  that  this  committee  be  authorized,  under  the  direction  of  the 
Executive  Council,  to  take  such  steps  as  may  be  deemed  advisable  to  present  the 
views  of  the  Association  as  occasion  may  arise  during  the  coming  year  to  any  leg- 
islative or  other  bodies  dealing  with  the  question." 

I  do  not  know  that  I  can  say  anything  further  at  this  stage,  your  Lordship, 
except  to  repeat  that  we  are  anxious  to  co-operate  in  every  possible  way  with  your 
Lordship  in  reaching  a  settlement  or  solution  of  the  problem,  and  we  shall  be 
glad  to  have  your  Lordship's  direction,  or  have  your  Lordship  indicate  in  some  way 
as  to  the  best  method  that  we  can  follow  to  assist. 

The  Commissioner  :  Do  I  understand  that  there  was  any  scheme  form- 
ulated by  the  Association? 

Mi;.  Wegenast:  No,  your  Lordship. 

The  Commissioner  :  Have  you  seen  your  way  yet  to  grapple  with  the  dif- 
ficulty that  Mr.  Stewart  points  out,  and  which  you  seem  to  think  is  a  defect  in  the 
ad  ?  lias  that  aspect  been  considered,  and  is  it  practicable  to  deal  with  it  in  a 
Workmen's  Compensation  Act? 

Mi:.  Wegenast:  Off  hand  I  would  say  yes.  Of  course  it  will  be  realized  in 
speaking  for  an  Association  like  the  Canadian  Manufacturers'  Association  that  it  is 
very  difficull  to  speak  generally.  We  represent  in  our  membership  in  this  Province 
alone  1,800  manufacturing  concerns — practically  the  whole  of  the  manufacturing 
interests  of  the  Province.  One  qualification  for  membership  in  our  Association 
is  thai  a  man  or  concern  shall  employ  at  least  five  persons  in  actual  work  in  some 
branch  of  manufacture  in  Canada,  and  of  those  qualified  for  membership  we  em- 
brace  00  per  cent,,  according  to  the  number  of  men  employed  and  the  amount  of 
tital  invested.  Numerically  it  is  slightly  less,  but  that  expresses  in  a  general  way 
the  scope  of  our  Association,  Now.  if  is  no  small  task  to  formulate  the  opinion  and 
the  views  of  an  Association  of  1.S00  manufacturing  concerns  and  corporations,  and 
whatever  T  shall  say  io  this  Commission  will  always  be  qualified  by  that  difficulty. 


1912  WOKKMEN'S  COMPENSATION   COMMISSION.  Ill 


Oil'  hand  I   would  say  that  I   have  reason  to  anticipate  thai   some  scheme  may  be 
worked   out    which    will    be   satisfactory   to   the    Manufacturers'   Association.        In 
doing  so  1  may  also  say  thai    the  only  thing  which  would   prevent  a  satisfactory 
working  out  of  such  a  scheme  will  be  an  undue  altitude  of  criticism  on  the  pari  of 
those  who  will,  have  the  most  to  gain  by  any  legislation  that  is  adopted.     I  think  it 
need  not   he   disguised   that    in   some   branches   of   legislation  the  Manufacturers' 
Association  and  the  Employers'  Association  do  come  into  conflict  with  the  interests 
of  the  labour  organization,  and  while  that  is  the  case,  and  while  there  is  owing  to  that 
a  certain  amount  of  what  might  be  called  suspicion,  there  is  no  reason  to  my  mind 
why  in  this  subject  of  all  subjects  the  elements  in  which  a  .possible  conflict  of  in- 
terest might  arise  should  not  be  reduced  to  a  minimum.     In  the  larger  aspects  of 
the  subject  the  employing  and  employee  interests  are  concurrent.     It  is  only  in  the 
working  out  of  the  smaller  details  that  we  will  probably  disagree.     Again  with  the 
risk  that  one  takes  in  anticipating,  I  may  say  that  so  far  as  I  can  see  any  contri- 
butions which  the  Manufacturers'  Association  will  give  to  this  discussion  will   he 
along  the  line  of  the  working  out  of  the  details  in  such  a  way  as  to  make  whatever 
system  is  adopted  such  a  system  as  will  be  conducive  to  the  best  interests  of  both 
parties  immediately  concerned. 

The  Commissioner  :  I  would  like  to  ask  you,  Mr.  Wegenast,  could  there  be 
got  together  a  number  of  manufacturers  who  have  associations  like  the  Massey- 
Harris  Company  is  said  to  have  for  the  benefit  of  their  employees,  which  they  say 
has  resulted  in  no  actions  having  been  brought  against  the  company?  I  see  that 
spoken  of  in  the  papers  that  the  Secretary  has  collected. 

Mi;.  Wegenast:  We  expect  to  have  one  of  the  managers  of  the  Massey-Harris 
Company  on  the  committee.  It  may  interest  you  if  I  give  the  personnel  of  the 
committee  which  has  been  appointed  to  co-operate  with  or  assist  this  commission 
in  the  working  out  of  some  act.  The  members  are,  Mr.  J.  R.  Shaw,  of  Woodstock, 
W.  K.  McNaught,  A.  W.  Kemp,  P.  W.  Ellis,  E.  J.  Davis,  R.  S.  Gourley,  John 
Eirstbrook,  A.  Fleming,  W.  B.  Tindall,  T.  A.  Russell,  Geo.  W.  Watts,  Alex. 
Saunders.  S.  J.  Williams.  R.  0.  McCullough,  J.  P.  Murray,  S.  Harris,  H.  Murray, 
John  Baillie,  C.  B.  Gordon,  of  Montreal,  F.  R.  Deacon,  A.  E.  McKinstry,  H.  Cock- 
shutt,  C.  R.  McCnllongh,  W.  M.  Gartshore  and  Thomas  Findlay.  Amongst  these 
we  have  endeavored  to  secure  representatives  of  such  types  of  compensation  systems 
as  there  are  now  under  the  present  act.  and  we  anticipate  adding  to  this  committee 
a  number  of  others. 

The  Commissioner:  Would  it  be  practicable  and  convenient  to  get  together 
the  different  schemes  that  there  are,  with  the  names  of  the  manufacturers  that  have 
established  them? 

Mr.  Wegenast:  That  would  be  rather  difficult  for  this  reason,  that  most  of 
these  schemes  are  in  the  first  place  unscientific,  and  they  are  not  supported  by  any- 
thing in  the  shape  of  written  rules.     They  rest  largely  upon  custom. 

The  Commissioner  :  One  feature  of  the  British  Act,  and  a  feature  of  some 
other  acts  is  that  schemes  that  are  approved  by  some  official  authority  may  take 
the  place  of  the  benefits  of  the  act. 

Mr.  Wegenast:  With  regard  to  that  I  might  say  that  to  me  personally  the 
greatest  defect  in  the  British  Act  is  the  want  of  machinery  to  set  that  provision 
into  operation.  That  provision  is  contained  in  seven  of  the  provincial  acts,  the 
seven  provinces  that  have  adopted  the  British  Act  in  Canada,  or  six  rather,  and 
they  have  vested  the  power  to  approve  of  these  schemes  in  the  Attorney-General. 
Now,  I  can  quite  conceive  that  the  Attorney-General  would  have  other  duties  which 
would  crowd  out  any  possibility  of  bis  dealing  with  a  matter  of  that  kind,  and  as  a 


142  MINUTES  OF  EVIDENCE:  No.  65 

matter  of  fact  I  have  yet  to  hear  of  a  single  scheme  being  presented  to  the  Attorney- 
General  of  any  of  the  provinces  for  his  approval.  The  experience  under  the  British 
Act  is  that  the  benefit  schemes  which  are  countenanced  by  the  act  languish  and  die, 
and  they  are  actually  being  reduced  in  number,  instead  of  increasing.  Speaking 
personally  that  is  I  think  the  greatest  defect  in  the  British  Act. 

The  Commissioner:  What  does  that  mean?  To  allow  that  method  of  con- 
tracting out  of  the  act? 

Me.  Wegenast  :     It  is  not  so  much  a  matter  of  contracting. 

The  Commissioner  :  A  man  takes  the  benefit  of  that  approved  scheme  in  lieu 
of  what  the  act  gives  him. 

Mr.  Wegenast:  Well,  that  is  one  way  of  putting  it.  The  difference  is  this, 
that  whereas  under  the  British  Act  without  adopting  any  schemes  an  employer 
bears  the  whole  burden  of  the  risk  of  injury  on  the  part  of  his  employees.  I  am 
not  speaking  of  the  question  of  contribution,  but  the  question  of  liability.  Whereas 
the  employer  bears  the  whole  liability  under  any  scheme  that  is  adopted,  the  liability 
is  diffused  or  spread  over  a  wider  area. 

The  Commissioner:     What  does  that  mean? 

Mr.  Wegenast  :  That  means  in  the  first  place  there  is  a  greater  guarantee  of 
solvency. 

The  Commissioner:  You  don't  mean  a  different  body  assisting  in  bearing 
the  burden? 

Mr.  Wegenast:  No,  I  was  thinking  of  the  mutual  principle,  although  the 
stock  insurance  principle  might  be  invoked. 

The  Commissioner:  What  is  in  my  mind,  you  are  not  suggesting  under 
these  schemes  that  the  workman  contributes  to  the  indemnity  fund  or  the  insurance 
fund? 

Mr.  Wegenast  :  No,  I  wasn't  suggesting  that  at  this  point.  I  think  that  is 
a  matter  of  minor  detail,  the  question  of  contribution — perhaps  not  of  minor  detail, 
but  a  question  of  detail. 

The  Commissioner:     Have  you  seen  this  Washington  Statute? 

Mr.  Wegenast:  No.  I  haven't  seen  that,  although  I  was  in  touch  with  the 
proceedings  leading  up  to  the  passing  of  the  act.  I  have  not  seen  it  in  its  com- 
pleted form. 

Mr.  Meredith  :     I  would  like  to  ask  if  this  will  affect  the  railroad  men  at  all  ? 

The  Commissioner:  That  will  depend  on  what  the  result  reached  is.  I 
suppose  this  covers  all  branches  of  industry. 

Mr.  Meredith  :  I  didn't  know  whether  it  would  affect  the  railroad  man  or 
not,  or  whether  it  would  have  to  be  a  Dominion  Act. 

The  Commissioner:  No,  it  is  within  the  competency  of  the  provincial 
legislature. 

"Mr.  Meredith  :  Because  we  have  really  more  accidents  in  our  brotherhood 
than  any  other. 

The  Commissioner:     What  branch  do  you  represent? 

Mr.  Meredith  :  The  Brotherhood  of  Railroad  Trainmen,  Switchmen  and 
Conductors.  I  represent  the  railroad  men  of  Ontario.  I  just  came  here  to  watch 
as  I  thought  probably  we  would  have  nothing  to  do  with  this  act  at  all.  being  a 
provincial  act. 

The  Commissioner:     Oh  yes,  you  are  interested. 

Mr.  Fred  Bancroft:  I  would  like  to  ask  Mr.  Wegenast  a  question,  if  it  is 
not  true  thai  the  provinces  of  this  country  can  have  their  Workmen's  Compensation 
Act  modelled  upon  the  British  Act,  and  that  where  the  power  is  vested  in  the 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  143 

Attorney-General  there  is  a  provision  also  in  that  act,  that  where  the  employer  has 
a  beneficial  scheme  of  his  own  he  shall  include  all  the  benefits  of  that  Compensation 
Act,  and  give  also  additional  benefit  to  the  employee  in  the  ratio  to  the  contribution 
that  the  workman  gives  to  the  scheme  of  the  employer. 

Mr.  Wegenast  :  I  don't  think  that  provision  is  included  in  all  the  provincial 
acts.  That  is  one  of  the  difficulties,  of  course,  of  the  British  Act.  The  British 
Act  says  in  so  many  words  that  any  scheme  the  employer  adopts  must  be  at  least 
as  beneficial  to  the  workmen  as  the  benefits  under  the  act,  and  the  interpretation 
that  has  been  put  upon  that  provision  renders  it  entirely  prejudicial  to  the  em- 
ployer to  enter  into  any  scheme. 

Mr.  Bancroft:  I  have  here  the  Manitoba  Act.  It  is  modelled  upon  the 
British  Act  also.  "  If  the  Attorney-General  after  taking  steps  to  ascertain  the 
views  of  the  employer  and  the  workmen  certifies  that  any  scheme  of  compensation, 
benefit,  or  insurance,  for  the  workmen  of  an  employer  in  any  employment,  whether 
or  not  such  scheme  includes  other  employers  and  their  workmen,  provides  scales  of 
compensation  not  less  favorable  to  the  workmen  and  their  dependants  than  the 
corresponding  scales  in  this  act,  and  that  where  the  scheme  provides  for  contri- 
butions by  the  workmen  and  the  scheme  confers  benefits  at  least  equivalent  to 
those  contributions  in  addition  to  the  benefits  to  which  the  workman  would  have 
been  entitled  under  this  act." 

Mr.  Wegenast:  A  verdict  of  $5,000  or  $10,000  always  looms  up  so  largely  as 
benefit  that  no  scheme  would  probably  be  found  approved  in  the  eyes  of  the  workmen 
who  would  doubtless  be  represented  in  any  petition  to  the  Attorney-General  for  the 
approval  of  such  a  scheme.  This  looms  so  large  that  it  is  found  practically  im- 
possible to  set  that  provision  in  operation.  That  is  really  why  that  provision  is 
not  made. 

Mr.  Bancroft  :  The  benefit  features  of  employers  gradually  die  out  under 
modern  compensation. 

Mr.  Wegenast:     That  is  supported,  I  think,  by  the  statistics. 

Mr.  Bancroft:  Your  Lordship,  I  think  it  is  only  fair  that  we  should  say 
something  on  this  matter  as  well  as  the  Manufacturers'  Association.  Myself  and 
two  colleagues  are  here  this  morning  representing  the  Central  Labour  Council.  I 
think  in  the  future  we  will  have  a  representation  before  you  either  privately  or 
publicly,  whichever  way  you  decide,  from  the  Dominion  Trades  Congress,  which 
represents  about  150,000  members  in  this  country,  an  Association  of  which  I  have 
the  honour  to  be  Vice-President.  We  likewise  will  endeavour  in  every  way  possible 
to  assist  you  to  draw  up  a  Workmen's  Compensation  Act  that  shall  have,  at  least 
we  hope,  the  favourable  support  of  the  workmen  of  this  country,  though  I  cannot  say 
with  any  degree  of  confidence  that  what  Mr.  Wegenast  has  mentioned  as  a  minor 
detail,  that  of  who  shall  provide  the  compensation  or  how  it  shall  be  provided,  will 
be  a  minor  detail  as  far  as  we  are  concerned  in  the  future.  I  think  there  is  a 
difference  of  opinion  there.  But  anyway  this  morning's  meeting  is  a  public  session 
and  we  can  speak  of  that  later.  I  might  say  it  was  the  Dominion  Trades  Congress 
who  first  asked  for  this  Commission.  We  asked  the  Cabinet  of  this  Ontario  Gov- 
ernment, and  they  appointed  a  Commission,  and  we  undoubtedly  must  do  all  in  our 
power  to  show  you  what  kind  of  Workmen's  Compensation  Act  we  want.  However, 
I  have  hardly  heard  of  any  scheme  this  morning  proposed  for  future  legislation.  I 
do  not  know  whether  there  is  something  waiting,  or  whether  it  is  necessary  to  have 
private  sessions  or  not,  but  I  will  say  this,  that  as  far  as  organized  labour  is  con- 
cerned, of  which  we  are  the  representatives,  they  certainly  do  consider  that  a  Work- 
men's Compensation  Act  of  the  nature  of  the  British  Act  is  in  the  interests  of  the 


1U  MINUTES  OF  EVIDENCE:  No.  65 

workmen  of  this  country  or  any  other  country,  notwithstanding  any  statements 
that  may  be  made  to  the  contrary.  1  would  also  like  to  point  out  to  you,  sir, 
while  no  mention  has  been  made  in  the-  line  of  a  scheme,  I  will  be  a  little 
more  frank.  A  considerable  number  of  opinions  has  been  brought  forward  at  dif- 
ferent times  as  to  the  contribution  to  Workmen's  Compensation  Act,  and  largely 
these  schemes  have  been  based  on  the  schemes  of  other  countries.  There  is  no 
contribution  in  Great  Britain.  There  is  no  contribution  in  the  Workmen's* Com- 
pensation Acts  of  this  country.  The  burden  is  on  the  employer.  It  is  said  there 
is  contribution  in  Germany,  which  is  not  true.  The  German  system  of  insurance 
has  three  principal  features.  One  is  compensation;  another  is  insurance  against 
sickness;  and  the  third  one  is  insurance  against  invalidity  and  old  age.  They  are 
so  interwoven  together  that  it  is  almost  impossible  to  decipher  as  to  which  is  which, 
unless  3'ou  go  into  detail,  but  the  burden  of  compensation  for  accidents  in  Germany 
rests  upon  the  employer.  The  insurance  against  sickness  is  about  two  thirds  by  the 
employees  in  an  industry,  but  two  thirds  of  the  representatives  on  the  administering 
Boards  of  the  sick  funds  of  Germany  are  working  men.  They  control  the  Sick 
Boards.     It  is  largely  the  same  in  invalidity  and  old  age. 

I  should  just  like  to  quote  a  little,  to  be  frank  about  it,  from  the  Parliamentary 
Committee  of  the  Trade  Union  movement  of  Great  Britain,  (of  which  I  believe 
there  are  some  forty  or  fifty  members  in  the  House),  the  Commissioner  of  which 
was  Bamsay  Macdonald,  whose  name  is  not  unknown  in  this  country,  and  some 
other  men  of  international  reputation,  and  probably  some  of  the  clearest  thinkers 
in  the  world  to-day, — they  went  as  a  Commission  to  Germany,  and  they  reported  on 
insurance  against  accident,  and  the  insurance  against  accident  replaced  the  old  law 
of  employers'  liability.  The  old  law  of  Employers'  Liability  I  think  is  on  the  desk 
this  morning.  I  think  it  is  largely  the  Ontario  Act.  It  is  a  very*  old  one,  and  I 
think  it  is  a  copy,  if  my  memory  serves  me,  of  the  old  English  liability  law  which 
has  been  dead  and  gone  for  some  years.  The  insurance  against  accident  replaces 
the  old  law  of  Employers'  Liability  to-day. 

The  personal  liability  of  the  employer  is  changed  into  a  collective  charge  upon 
the  entire  trade  and  the  individual  establishment  is  charged  according  to  the 
measure  of  their  risk  and  the  amount  they  have  paid.  I  think  Mr.  Wegenast  him- 
self, as  well  as  others  of  the  manufacturers,  understands  clearly  the  trade  associa- 
tion- of  the  employers  in  Germany  have  the  administration  of  the  compensation  for 
accidents,  but  there  is  this  difference,  that  while  the  burden  is  on  the  employer  in 
Germany  the  compensation  for  accidents  does  not  start  until  after  fourteen  weeks, 
during  which  fourteen  weeks  the  insurance  against  sickness  has  been  in  operation. 
For  instance,  if  a  man  gets  hurt  in  Germany  and  was  taken  home  he  would  be  put 
into  the  insurance  against  sickness  for  thirteen  weeks.  During  that  time  he  would 
have  half  his  wages  paid,  medical  treatment,  nursing,  and  so  on.  At  the  fourteenth 
week  the  Workmen's  Compensation  comes  into  operation.  This  compensation  is 
furnished  by  the  employers  through  the  trade  associations.  They  take  care  of  the 
man  afterwards  and  they  pay  him  as  high  as  <>»>  2-3  per  cent,  of  his  total  income 
while  he  is  so  incapacitated.  Thai  is  in  Germany.  So  that  it  would  be  impossible 
and  unfair  to  attempt  to  introduce  into  this  province  or  any  other  province,  a  law 
which  had  contributions  from  employees  to  a  fund  which  would  be  parallel  to 
insurance  against  sickness  in  Germany.  In  Greal  Britain  the  burden  is  on  the 
industry. — that  is  I  he  people  who  get  injured  in  the  industry.  It  is  the  same  in 
Germany. 

You  mentioned  the  Stale  of  Washington.  Here  are  recommendations  for  a 
Workmen's  Compensation  Act   for  New  York  State.     This  report  is  one  signed  by 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  145 

eight  of  the  most  prominent  labour  men  in  New  York,  and  six  of  the  most  prominent 
men  in  political  work  in  New  York,  the  labour  men  representing  three  hundred 
thousand  men.  and  the  others  representing  over  thirty-eight  thousand.  This  is 
what  they  say  : 

■■  Burden  of  Payment/5     Persons  to  be  compensated  :     They  do  not  draw  up  a 
long  act,  but  they  say  all  employees  whose  wages  are  less  than  $2,500  a  year. 

"  Burden  of  Payment  "  is: 

(a)    The  eutiie  eost  of  compensation  to  rest  upon  employer. 

(l>)  In  ease  of  occupational  disease  the  eost  of  compensation  to  rest  upon  the 
last  employer. 

(c)  The  sub-contractor,  contractor,  and  principal  to  be  jointly  and  severally 
liable  for  compensation. 

"Injuries  to  be  compensated."  Injuries  by  accident  arising  out  of  and  in  the 
course  of  employment: 

(a)  Disability  or  other  injuries  from  diseases  incident  to  particular  occupa- 
tions to  count  as  injuries  by  accident. 

(b)  The  State  Department  of  Health  to  declare  to  be  an  occupational  disease 
any  disease  as  the  result  of  the  conditions  of  a  specified  occupation. 

(c)  The  State  Department  of  Health  to  investigate  any  alleged  occupational 
disease  when  so  petitioned  by  any  county  or  municipal  medical  officer  or  on  its  own 
motion. 

It  is  clear  they  are  assessed.     There  is  no  difficulty  about  it. 

Now,  there  is  one  thing  I  think  undoubtedly  that  should  be  left  out  of  the 
Workmen's  Compensation  Act,  and  that  is  any  such  thing  as  contributory  negligence 
on  the  part  of  the  employee.  Modern  thought  has  done  away  with  it.  In  Germany 
and  Great  Britain  where  compensation  has  been  discussed,  the  old  argument  that  a 
workman  will  injure  himself  for  the  purpose  of  getting  a  generous  compensation 
has  died  out  altogether.  It  has  died  out  by  its  own  uselessness.  No  man  gets 
hurt  to-day  because  be  wants  to  get  a  little  money;  and  further  (and  I  think  this 
will  be  a  very  great  help  to  you)  wherever  there  has  been  a  generous  Workmen's 
Compensation  Act  with  the  burden  upon  the  employer,  it  has  almost  been  un- 
necessary for  the  factory  inspectors  or  anybody  else  to  see  the  machinery,  because 
the  employer  has  seen  to  it  himself  that  the  machinery  has  been  so  protected,  for 
he  sees  it  is  far  cheaper  for  him  to  protect  the  machinery  than  it  is  to  pay  the 
compensation. 

Now,  that  is  only  a  little  glance  of  what  we  mean  by  compensation.  I  think 
in  the  future  we  may  be  able  to  give  to  you  very  clearly  what  is  our  idea.  I  don't 
know  whether  it  will  be  in  the  form  of  an  act  itself,  but  we  will  make  suggestions. 
I  have  been  a  little  more  frank  this  morning  than  the  manufacturers,  but  there  is 
Ihe  way  we  feel  about  it.  We  think  that  contributory  negligence  has  no  place  in 
the  Workmen's  Compensation  Act  to-day,  and  that  will  find  no  favour  with  the 
workmen.  The  burden,  as  far  as  the  workers  see  it,  should  rest  upon  the  industry, 
and  the  compensation  should  start  from  the  day  the  worker  is  injured.  These  are 
three  fundamental  principles  of  a  future  Workmen's  Compensation  Act.  As  I 
say  we  have  been  a  little  more  frank,  and  we  will  be  more  frank  in  the  future.  I 
wish  I  could  be  as  optimistic  as  Mr.  Wegenast  when  he  says  the  whole  thing  could 
be  reduced  to  a  minimum.  If  I  thought  for  a  moment  that  he  had  so  accepted  our 
views  that  the  thing  would  be  reduced  to  a  minimum,  we  would  be  very  happy  about 
the  Workmen's  Compensation  Act.     Our  views  will  be  stated  to  you  later. 

Me.  Miller  :  Your  Lordship,  I  would  like  to  say  a  few  words  here  as  a  correc- 
tion of  something  which  was  said  in  connection  with  the  Employers'  Liability  Act 

If)    L. 


146  MINUTES  OF  EVIDENCE:  No.  65 

of  Great  Britain,  and  more  particularly  in  connection  with  the  insurance  companies. 
When  the  old  act  was  first  amended  in  1896  the  tariff,  generally  speaking,  of  the 
insurance  companies,  who  up  to  that  time  had  no  data  on  which  to  go  as  to  the 
tariff  they  were  to  charge  to  the  employers,  was  25  shillings  per  annum  per 
£100  of  wages  paid  to  the  workman.  That  in  1906  or  1907,  when  I  left 
Britain  for  Canada,  had  been  reduced,  and  the  act  had  been  amended  twice.  The 
third  amendment  was  just  coming  into  operation  in  1907  or  1908.  The  tariff  of 
the  insurance  companies  to  the  employers  had  been  reduced  to  10  shillings  or  half 
a  sovereign  per  £100  of  wages  paid  to  the  workman  per  annum.  That 
is  practically  one  half  per  cent,  of  the  wages  paid  yearly.  I  do  not  think 
that  any  employer  can  claim  that  that  is  an  unbearable  burden  to  put 
upon  the  industry  which  he  is  organizing  or  the  factory  working  under 
him.  I  think  also  that  there  should  be  no  limit  as  to  the  number  of  men 
employed  by  any  manufacturer  or  employer.  If  he  employs  one  man 
m  any  occupation  whereby  he  is  likely  to  be  injured  he  should  come  under 
the  compensation  law,  and  there  should  be  no  contributory  negligence"  on  the  part  of 
other  workmen  employed,  and  the  compensation  should  be  from  the  date  of  the 
accident.  In  the  first  amended  *act  of  Britain  there  were  two  weeks,  I  think  it 
was,  wherein  he  could  not  claim  compensation.  That  was  because  those  who  drew 
up  the  act  in  the  first  place  in  trying  to  safeguard  the  interests  of  the  employers 
who  bore  the  burden,  the  second  point  was  overlooked.  The  second  point  was 
missed  in  looking  after  that  too  keenly,  and  that  was  so  that  malingerers  or  em- 
ployees, who  might  by  getting  a  small  accident  where  it  would  only  be  necessary  to 
lay  off  a  day  or  a  couple  of  days,  that  they  would  have  to  lay  off  the  two  weeks 
before  they  could  get  anything.  In  the  last  amendment  it  has  been  amended 
so  that  if  the  injury  incapacitates  the  workman  for  longer  than  two  weeks  the 
compensation  dates  from  the  date  of  the  accident.  In  the  Manitoba  Act  I 
believe  that  that  clause  is  incorporated,  but  it  also  emphasizes  the  fact  further  on 
whereby  they  do  not  get  any  compensation  during  that  two  weeks.  I  am  not  quite 
sure,  because  I  have  only  had  a  glance  at  it,  but  I  believe  that  is  so.  I  claim 
any  compensation  act  that  we  bring  in  the  Province  of  Ontario  should  be  as 
short  and  concise  as  possible.  There  should  be  no  long  clauses  or  a  great  number 
of  clauses  to  it.  It  is  not  necessary.  Also,  there  should  be  no  limitation,  only  in 
the  compensation.  In  Britain,  although  I  am  not  clear  because  I  hadn't  a 
copy  of  the  act,  but  I  believe  that  when  an  accident  is  fatal — all  accidents  are  based 
on  the  average  per  week  of  the  twelve  months  previous  to  the  accident,  if  he  has 
been  in  that  employment  that  length  of  time.  If  he  has  been  a  shorter  time  than 
twelve  months  it  is  taken  on  the  length  of  time  of  service  in  that  firm,  and  the 
average  of  his  wages  is  given  to  him — that  is  50  per  cent.  Here  the  same  thing 
should  apply.  Instead  of  what  has  been  mentioned  where  employers 
may  be  up  against  a  law  suit  of  $10,000  or  $12,000  or  $15,000  it  should  be  clearly 
stated  that  in  the  case  of  a  fatality  that  the  remuneration  should  be  based  on  the 
earnings  of  the  injured  for  a  certain  number  of  years.  I  think  the  British  act 
puts  it  as  three  years.  I  am  not  clear  because  T  am  speaking  entirely  from 
memory,  but  I  believe  it  is  three  years.  It  is  a  limited  salary  of  course.  The  law 
onlv  takes  consideration  of  workmen  who  are  earning  within  a  certain  limit.  I 
think  it  is  £2  or  £3.  That  certainly  ought  to  be  closely  looked  into  in  the  form- 
ing/of  any  act  for  the  Province  of  Ontario.  There  are  lots  of  data  to  go  on 
from  other  countries  and  from  ihe  States,  that  should  make  our  work  here  very 
murih  less  troublesome,  and  we  should  be  able  to  formulate  some  law  whereby  we 


1912  WOEKMEN'S  COMPENSATION  COMMISSION.  147 

would  eliminate  the  necessity  or  the  opportunity  for  litigation  in  connection  with 
compensation. 

With  regard  to  the  insurance  companies  in  Britain,  taking  the  case  of  our 
friend  who  has  lost  his  arm.  The  injured  workman  comes  within  the  scope  of  the 
Compensation  Act  in  Britain  automatically.  The  Factory  Inspector's  office  in  the 
district  has  to  be  notified  of  every  accident  that  happens  in  a  factory  or  workshop. 
Even  domestic  servants  now  come  within  the  scope  of  the  act.  Every  person  in 
Britain  to-day,  I  believe,  that  is  earning  wages  comes  within  the  scope  of  the 
British  Act,  and  if  a  workman  has  to  leave  the  workshop  for  either  two  or  four 
hours  (I  am  speaking  from  memory)  to  be  taken  care  of,  that  is,  to  have  his  wounds 
dressed, — if  it  is  only  a  finger  cut  or  a  flesh  cut,  if  he  has  got  to  leave  the  factory 
for  a  certain  number  of  hours  in  connection  with  it,  that  has  to  be  reported  to  the 
Superintendent  of  Factory  Inspectors  within  that  district  within  so  many  hours, 
or  the  employer  is  up  against  the  possibility  of  a  fine  in  the  law  courts  for  not 
having  complied  with  the  Factory  Act  in  the  way  of  reporting  accidents.  The 
moment  that  a  man  is  laid  off  he  comes  within  the  scope  of  the  act,  and  the  burden 
of  payment  is  on  the  employer  no  matter  how  he  is  insured  against  that  liability, 
and  when  a  case  is  brought  in  a  law  court  it  is  the  employer  that  has  to  put  up  the 
fight.  The  employee  who  has  been  injured  has  nothing  to  do  with  the  insurance 
company  with  which  his  employer  may  have  been  insured.  I  think  these 
various  points  ought  to  be  taken  into  consideration.  The  interpretation  of  the 
various  clauses  in  the  British  Act  caused  a  great  lot  of  litigation  in  the  first  three 
years  that  the  first  amendment  was  in  force.  There  were  all  the  different  limit- 
ations— the  height  of  a  building  from  which  a  man  should  fall,  and  so  on,  and  the 
kind  of  place  that  was  going  to  be  declared  a  factory  so  as  to  come  within  the 
Factory  Act.  All  these  things  led  to  litigation,  and  it  is  true  that  a  larger  proportion 
of  the  money  that  was  spent  in  those  cases  went  to  pay  law  expenses  than  what  went 
to  the  injured.  I  do  not  think,  sir,  that  that  will  be  so  to-day,  although  I  have  no 
data  to  go  on.  I  have  seen  statistics  wherein  it  was  said  that  from  thirty  to  forty 
per  cent.,  or  $30  to  $40,  in  every  $100,  I  think,  was  all  that  gets  to  the  workman  in 
Britain,  but  I  do  not  think  that  can  apply  to  the  last  amendment  of  the  British 
Act.  These  statistics  must  have  been  taken  from  the  beginning,  1896,  I  fancy.  I 
do  not  think  there  is  any  chance  of  the  same  amount  of  litigation  under  the  British 
Act  now  that  there  was  in  the  amended  act  of  1896,  because  of  all  the  different 
limitations  and  interpretations  that  had  to  be"  fought  out  in  the  courts.  I  think 
the  more  concise  and  simple  the  act  the  better  it  will  be  for  everybody. 

With  respect  to  the  other  objection  that  the  gentlemen  have  mentioned  here, 
in  connection  with  the  insurance  companies  laying  a  ban  as  it  were  upon  the  man 
over  35  or  40,  or  whatever  it  may  be,  that  is  already  in  existence  independent  of 
the  insurance  companies.  The  manufacturer  is  in  business  for  profit,  and  when  a 
man  gets  to  a  certain  age  he  has  more  difficulty  all  the  time  as  he  grows  older  in 
getting  employment  under  the  present  industrial  system.  It  is  not  because  of  the 
insurance  companies  in  Britain  laying  any  ban  upon  the  older  men  because  they  are 
more  liable  to  accident  than  the  younger  men.  That  is  quite  true,  but  that  system 
is  being  applied  by  the  employers,  and  we  have  been  told  by  the  employers,  if  there 
had  been  no  Workmen's  Compensation  Act  in  Britain,  that  that  is  one  of  the  phases 
of  our  industrial  system  at  the  present  time. 

Mr.  Bancroft:  There  has  been  an  argument  used  against  the  British  Act 
which  has  the  entire  sympathy  of  labour  in  this  country,  and  that  is  that  in  the 
case  of  the  insolvency  of  the  employer  the  workman  loses.  It  is  not  generally  known 
that  there  is  a  provision  made  in  the  British  Act  for  the  insolvent  employer,  that 


148  MINUTES  OF  EVIDENCE:  No.  65 

if  the  employer  is  not  insured  against  liability  under  the  act,  a  workman  can  claim 
up  to  the  extent  of  £1Q>Q,  which  is  equivalent  to  $500  as  a  preferential  debt  which 
must  be  paid  in  full  before  any  other  creditor  can  receive  anything. 

The  Commissioner  :     That  would  not  help  a  case  such  as  Mr.  Hunt's. 

Me.  Bancroft:  If  the  compensation  is  a  weekly  payment  this  amount  is  to 
be  taken  out,  but  with  regard  to  any  balance  'over  £100  the  debt  must  be 
proved  for  as  an  ordinary  debt.  That  is  only  one  part  of  the  clause  and  there  are 
Jive.  This  is  an  interpretation  of  the  British  Act  by  one  of  the  foremost 
barristers  in  Great  Britain,  and  that  is  how  a  man  can  claim.  Insolvency  has  no 
terrors  for  the  workman.  I  believe  if  you  were  to  give  us  the  British  Act  we  would 
meet  the  terrors  of  insolvency  and  the  other  objections  that  the  manufacturers 
put  up. 

Mr.  Miller:     In  Mr.  Hunt's  case  he  would  simply  have  claimed  by  notice  to 

us  employer,  and  another  notice  to  the  Inspector  of  Factories  that  he  had  been 

injured,  and  the  act  goes  into  operation  at  once.     If  his  employer  said  he  could 

not  pay  any  compensation  he  is  under  the  law  and  he  is  compelled  to  pay.     It  is  not 

a  question  of  whether  he  is  able  or  not,  the  law  says  he  has  got  to  pay. 

The  Commissioner  :  Have  you  got  a  country  where  it  is  possible  to  get  some- 
thing out  of  a  man  who  hasn't  got  it? 

Mr.  Miller  :  In  this  particular  case  the  man  would  have  been  made  insolvent 
and  the  first  charge  against  his  estate  would  have  been  Mr.  Hunt's  claim.  It  is 
a  preferential  claim  the  same  as  a  workman's  wages  are  against  any  insolvent  firm. 

The  Commissioner:  If  this  man  he  was  working  for  was  a  tenant  of  the 
premises  and  had  no  property,  his  compensation  would  be  useless  to  him. 

Mr.  Miller  :     He  has  a  business. 

Mr.  Hunt:  The  mill  could  be  sold,  sir.  I  was  just  thrown  to  one  side.  He 
owned  the  mill. 

The  Commissioner:  How  did  the  lawyer  come  to  advise  you  that  you 
couldn't  get  your  money? 

Mr.  Hunt  :  He  claimed  the  case  would  go  against  me  because  there  was  no 
actual  negligence  shown  on  the  part  of  the  employer. 

Mr.  Bancroft:  "  In  any  case  where  the  workman  knew  of  the  defect  or 
negligence  which  caused  his  injury,  and  failed  without  reasonable  excuse  to  give 
or  cause  to  be  given  within  a  reasonable  time  information  thereof  to  the  employer 
or  some  person  superior  to  himself  in  the  service  of  his  employer,  unless  he  was 
aware  that  the  employer  or  such  superior  already  knew  of  the  said  defect  or  neg- 
ligence "  and  so  on.  That  is  where  the  onus  is  put  upon  the  employee.  This  is 
the  old  Employers'  Liability  Act  in  Great  Britain,  but  I  believe  it  ought  to  be 
sufficiently  changed,  and  very  much  changed,  before  the  public  get  justice. 

The  Commissioner:  I  think  the  juries  generally  apply  that  in  favour  of  the 
workman. 

Mr.  Miller  :  There  is  one  phase  of  the  question  which  ought  to  be  taken  into 
consideration  that  has  not  been  dealt  with  very  largely  this  morning,  and  that  is  the 
prevention  of  accidents.  The  whole  trend  of  the  law  should  be  for  the  prevention 
of  accidents  as  much  as  for  the  compensation  for  an  accident  when  it  has  happened. 
In  Greal  Britain  they  have  a  very  large  system  of  factory  inspection.  I  do  not 
believe  there  is  anything  better  any  place  in  the  world  than  they  have  there  so  far 
as  factory  inspection  is  concerned.  The  employer  is  bound  by  law  to  protect  his 
machinery  in  such  a  way  that  it  will  eliminate  the  possibility  of  accident  as  much  as 
possible. 


1912  WORKMEN'S  COMPENSATION   commission.  L49 

Mr.  Bunt:  That  brings  up  the  point  of  where  I  was  hurt.  If  it  had  heen 
in  Britain  1  wouldn't  have  been  hurt,  hut  in  this  country  there  is  uo  inspection 
under  the  act  for  a  portable  sawmill.  I  don't  think  that  comes  under  the  Factory 
Act. 

Me.  Meredith  :  I  would  like  to  say  with  respect  to  the  railway  man  that  the 
chief  difficulty  we  have  found  has  been  the  matter  of  putting  the  matter  back  from 
one  court  to  another.  If  we  get  a  verdict  in  one  court  and  there  is  anything  in 
favour  of  the  workingman  it  is  a.  dead  sure  thing  it  will  be  put  back  to  another 
court,  ami  if  it  still  is  sustained  in  favour  of  the  workingman  then  it  is  put  back  to 
another  court,  till  at  last  whatever  compensation  the  man  got  or  his  family  got 
would  amount  to  nothing, — the  law  costs  had  eaten  it  all  up.  That  lias  been  one 
of  our  great  difficulties  as  railroad  men.  Perhaps  in  the  Dominion  we  have  some 
better  laws  than  some  of  these  men  seem  to  enjoy  with  respect  to  the  manufacturers, 
hut  I  think  if  there  could  be  some  way  arranged,  as  far  as  we  railroad  men  are  con- 
cerned, that  if  a  man  is  killed  or  hurt  that  there  should  be  a  definite  sum  set 
which  lie  should  be  able  to  gei  without  saying  he  was  contributory  to  the  act.  he- 
cause  it  is  easily  shown  nearly  always  in  the  case  of  railroad  men,  I  know — in  fact 
in  my  own  case  it  was  shown  that  way — that  I  probably  was  as  much  to  blame  as 
anybody  else  in  getting  hurt.  Well,  T  may  have  been  a  little  careless,  but  at  the 
same  time  here  is  one  thing  we  find:  there  is  provision  made  in  the  Railway 
Companies'  Laws  that  there  are  certain  things  we  must  not  do  in  shunting  and 
coupling,  and  in  going  around  the  trains,  but  we  find  if  we  don't  do  those  things 
they  don't  want  us.  Tf  you  are  not  prepared  to  take  a  risk  you  can  simply  go 
about  your  business,  we  can  get  somebody  else  that  will.  So  a  man  naturally  goes 
and  takes  a  risk  and  he  gets  hurt.  I  had  that  hand  all  smashed  up,  and  I  have  had 
two  or  three  other  accidents  besides  that,  in  getting  up  between  the  engine  and  the 
car.  and  so  on.  I  was  a  conductor  at  that  time,  and  I  found  if  I  didn't  take  those 
risks  they  didn't  want  me.  Now,  that  was  all  there  was  about  it.  We  want  to 
get  over  that  difficulty.  What  we  want  is  when  a  man  gets  hurt,  when  his  family 
is  dependent  on  him  for  a  living  and  he  is  dependent  on  his  good  health,  and  his 
strength  and  his  limbs  to  get  a  living  for  them — he  suddenly  finds  that  that  source 
of  living  is  cut  off.  What  we  want  is  that  something  should  go  into  effect  that 
would  insure  a  man's  family  and  himself  if  he  is  permanently  injured,  that  he 
will  be  able  to  get,  at  any  rate,  a  bare  living  at  the  expense  of  somebody,  we  are  not 
going  to  say  who.  In  the  great  majority  of  cases  with  us  we  have  an  insurance 
scheme.  I  am  in  it  myself  to-day.  I  am  paying  in  it  yet.  I  tried  when  I  got  to 
be  nearly  70  years  old  to  get  part  of  that  out,  but  the  doctors  said  I  was  yet  fit  to 
work  as  well  as  any  other  man  and  he  would  not  pass  me.  So  I  have  to  pay  into 
this  insurance  yet.  although  there  is  a  provision  made  that  we  should  be  able  to 
pull  out.  Thank  God,  I  am  not  dependent  on  the  railroad  for  a  living  to-day  so 
I  am  able  to  get  along  without  it,  but  if  I  was  I  would  be  like  I  see  a  good  many 
more,  my  family  would  be  probably  starving  and  I  would  be  out  of  a  house  and 
home. 

Mr.  Taber:  As  an  employer  of  labour  T  would  like  to  say  a  few  worls.  I 
have  had  some  accidents  in  my  place  and  not  having  liability  insurance  I  of  course 
had  to  see  them  through.  I  now  have  liability  insurance,  that  is,  insurance  against 
legal  action,  but  T  do  not  think  but  that  when  employees  are  hurt  a  good  em- 
ployer will  always  stand  behind  them.  I  would  just  like  to  say  that  we  want 
insurance ;  that  any  good  employer  feels  he  wants  insurance,  not  assurance  in  that 
way,  and  I  surest  some  form  of  reciprocal  insurance,  and  that  all  the  hazards  be 
classified,  and  the  government  would  deal  with  the  liability  to  each  injured  person, 


150  MINUTES  OF  EVIDENCE:  No.  65 

and  the  manufacturers  and  employers  of  labour  would"  then  be  assessed  according  to 
the  damage.  There  are  so  many  different  lines  of  business  that  it  would  require 
very  comprehensive  legislation  to  protect  all  the  different  workmen  that  are  injured. 
There  is  no  doubt  about  that,  but  it  is  a  matter  for  the  Government  or  the  Com- 
mission in  some  way  to  get  at  the  whole  question  to  secure  everybody,  because  there 
is  the  insolvent  employer  you  can't  get  at,  like  the  case  of  Mr.  Hunt.  He  can  get 
no  remuneration  or  no  help,  and  if  it  was  done  through  a  Government  tribunal 
in  some  way  this  man  could  get  some  help,  because  the  whole  class  of  that  par- 
ticular manufacturer  or  employer  of  labour  would  have  to  bear  it  universally.  A 
manufacturer  or  employer  of  labour  would  then  feel  secure  also.  Liability  insurance 
is  not  satisfactory  to  a  man  from  the  human  side  of  view.  I  feel  that  way.  I 
feel  I  would  like  to  do  something  for  those  who  are  hurt  in  my  employ,  and  I  do  it, 
but  the  liability  insurance  would  not  help  me  or  them  at  all.  I  pay  the  money 
out  to  them  and  the  return  is  only  legal  protection,  and  the  moral  side  is  lost  sight 
of.     I  think  that  is  all  I  have  to  say. 

Mr.  Wegenast:  What  company  do  you  represent,  if  you  don't  mind  telling 
me? 

Mr.  Taber:     The  Toilet  Laundry  Company. 

The  Commissioner  :  I  didn't  quite  follow  what  your  suggestion  was.  Would 
it  be  that  there  should  be  an  assessment  upon  all  the  employers  when  an  accident 
happens,  that  they  should  by  an  assessment  form  a  fund  to  meet  all  the  expense? 

Mr.  Taber:  Well,  in  that  case,  your  Lordship,  there  would  be  some  delin- 
quents. Let  the  Government  deal  with  this  question,  and  attend  to  all  accidents 
and  remunerate  according  to  the  loss,  taking  into  consideration  the  risk  and  how 
the  employee  had  been  injured  and  the  conditions  he  worked  under,  and  whether 
he  had  been  careless  or  negligent.  They  could  weigh  all  those  matters  and  then 
afterwards  assess  that  class  of  industry  with  that  loss.  That  is  over  the  whole 
class,  on  a  basis  of  insurance  or  an  assessment  in  the  form  of  a  tax.  That  would 
cover  the  points  that  I  learned  from  the  gentlemen  here  the  Workmen's  Act  does 
not  cover.     That  is  what  I  would  think. 

Mr.  Bancroft:  Would  you  be  in  favour  of  the  German  system  of  compen- 
sation, where  the  employers  form  trade  associations  and  have  a  fund  for  that 
purpose,  and  distribute  it  over  the  industry? 

Mr.  Taber:  Of  course  that  would  be  working  against  the  interest  of  some. 
There  would  be  a  class  that  would  be  in  that  association  and  a  class  that  would 
not.  An  insolvent  man  would  possibly  not  be  in  that  association  and  a  man  in 
i-hat  case  would  have  no  relief  at  all :  he  would  have  no  remuneration. 

Mr.  Bancroft  :  Do  you  intend  the  whole  burden  to  be  borne  by  the 
employers  ? 

Mr.  Taber:  Yes,  as  a  class.  Arrange  them  all  into  classes.  Classify  them 
as  our  present  system  of  assessment  is. 

Mr.  Gibbons  :  You  mean  for  instance  take  men  who  are  engaged  in  foundry 
work,  in  the  case  of  an  accident  those  who  operate  foundries  would  be  liable  foit 
that  accident? 

Mr.  Taber:  Yes,  and  in  the  furniture  business  anybody  who  is  injured  in 
ihat  line,  it  would  be  that  class. 

The  Commissioner:  Do  you  not  think  it  would  make  some  trouble  with  a 
man  who  has  been  hurt  in  a  factory,  and  where  the  man  has  been  careless  or  had 
not  proper  appliances?  Would  the  careful  man  not  say:  Why  should  I  be  called 
upon  to  help  pay  his  loss? 

Mr.  Taber:     It  would  then  work  against  some  men  who  had  fine  factories 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  151 

with  safety  appliances.     It  would  work  out  against  those  men  and  it  would  be  a 
case  then  for  the  factory  inspectors  to  see  that  the  equipment  was  up  to  date. 

Me.  Bancroft:  In  Germany  they  have,  I  don't  know  whether  it  is  a  Con- 
ference Board  or  what  it  is,  but  they  have  some  kind  of  a  Board  where  they  decide 
as  to  the  most  modern  protective  devices,  and  the  employer  has  to  instal  them. 

The  Commissioner  :  It  has  been  pointed  out  that  there  is  nothing  analogous 
to  the  trade  associations  in  England  at  all,  that  they  are  what  used  to  be  the  old 
Gilds;  that  these  trade  associations  are  live  associations,  and  that  there  is  no 
such  thing  in  England. 

Mr.  Bancroft:  They  are  nothing  like  the  Gilds.  The  Employers'  Asso- 
ciation in  Germany  consists  of  employers,  and  the  Gilds  have  masters  and  appren- 
tices and  journeymen. 

Mr.  Taber:  I  can  understand  the  manufacturers'  position.  Their  attitude 
is  perfectly  right.  They  feel  they  want  insurance.  They  feel  they  have  to  stand, 
as  I  have  had  to  do,  behind  old  employees  or  someone  who  has  been  faithful  in 
their  business  and  they  don't  like  to  see  turned  out,  although  they  may  be  a  little 
negligent  and  get  hurt.     I  think  that  is  a  proper  position  to  take. 

Mr.  Wegenast:  The  chief  concern  of  the  manufacturing  interests  and  the 
employing  interests  in  this  Provinee  will  be  to  my  mind  to  eliminate  the  waste  that 
is  incident  to  our  present  system,  and  to  any  system  of  employers'  liability.  If  we 
can  eliminate  the  ambulance-chasing-lawyer  it  will  be  a  good  thing. 

The  Commissioner:     What  is  that? 

Mr.  Wegenast:  The  so-called  ambulance-chasing-lawyer,  and  the  dividend 
collector  of  the  liability  insurance,  then  we  shall  have  conserved  to  a  very  large 
extent  the  interests  of  the  employers.  I  do  not  want  to  enter  into  any  details,  but 
it  just  occurred  to  me  to  add  that  to  what  Mr.  Taber  had  said. 

Mr.  C.  Lawrence:  I  am  a  locomotive  engineer  by  occupation.  We  have 
been  interested  for  some  time  in  a  Workmen's  Compensation  Act,  and  I  have  been 
trying  to  get  what  information  I  could  from  different  sources.  I  attended  a 
meeting  in  Chicago  last  Monday  and  Tuesday,  of  a  Commission  appointed  by  the 
President  of  the  United  States,  to  enquire  into  and  report  upon  some  form  of 
Workmen's  Compensation  Act.  A  number  of  gentlemen  spoke  at  that  meeting. 
Among  them  were  two  or  three  solicitors  for  railroad  companies.  A  gentleman 
named  Lathrop,  a  solicitor  of  a  company  in  'Sante  Fe  spoke,  and  said  he  was  one  of 
a  number  of  twenty-one  lawyers  who  met  in  New  York  City  sometime  last  April, 
I  think.  I  am  not  sure  as  regards  the  date,  but  it  was  after  this  Commission  was 
appointed.  These  lawyers  were  from  different  parts  of  the  United  States,  all  rail- 
road solicitors,  and  he  said  they  were  unanimous  in  their  opinion  that  there  should 
be  some  better  compensation  act  for  interstate  commerce.  I  understand  that 
in  those  engaged  in  commerce  from  one  state  to  the  other.  He  read  a  resolution 
there  pledging  themselves  to  lend  this  Commission  all  the  assistance  they  could 
towards  working  out  a  Compensation  Act  along  those  lines.  There  was  another 
solicitor  there  representing  the  New  York  Central  lines  named  Carv,  a  Chicago 
gentleman.  He  gave  some  valuable  information,  and  he  cited  the  method  that  the 
New  York  Central  lines  had  used  in  meeting  these  cases.  He  said  they  never 
allowed  a  case  to  go  to  court  if  they  could  prevent  it.  They  often  paid  out  what 
to  their  judgment  was  more  in  order  to  settle  a  case,  to  prevent  it  going  to  court, 
and  he  gave  two  or  three  different  reasons.  The  principal  one  was  that  if  a  case 
went  to  court  there  always  was  created  a  bad  feeling  between  the  employees  and 
the  officers  of  the  road,  and  they  wished  to  avoid  that  as  much  as  possible.  He 
thought  in  the  end  they  paid  out  a  little  more,  or  it  cost  the  companies  a  little  more 


152  MINUTES  OF  EVIDENCE:  No.  65 

by  doing  this  than  if  they  allowed  it  to  go  to  court,  but  they  had  better  service  from 
their  employees  by  not  doing  so. 

This  Com  mission  has  been  meeting  a  number  of  times  and  there  are  some 
minutes  of  the  previous  meetings,  and  if  it  would  be  any  service  to  the  Commission 
1  would  be  willing  to  let  them  have  the  books.  They  have  promised  to  furnish  me 
with  the  minutes  of  all  the  meetings. 

At  one  of  the  meetings  which  was  held  in  June,  in  Washington,  there  was 
a  gentleman  there  who  had  a  Bill  drafted  up.  and  I  think  something  along  this 
line  would  be  satisfactory  to  the  railway  men  of  this  country.  This  gentleman 
stated,  "  We  would  like  to  get  away  from  this  litigation  if  we  possibly  could."  The 
man  who  had  this  Bill  drafted  up — I  couldn't  say  it  was  submitted  to  Con- 
gress, but  it  was  drafted  up  for  that  purpose,  has  nearly  everything  covered  in  it. 
They  propose  in  this  Bill  to  assess  steam  roads  for  instance.  They  were  talking 
.most  about  them.  He  proposed  in  this  Bill  to  tax  every  locomotive  in  the  country 
so  much  a  year  for  the  purpose  of  creating  this  fund.  Then  there  is  so  much 
allowed  in  the  case  of  death,  and  it  is  paid  to  the  widow  or  the  man's,  benefic- 
iaries, so  much  a  month.  For  instance,  in  the  case  of  a  widow  it  would  extend 
over  until  90  days  after  she  re-married,  or  as  long  as  she  lived.  It  also  provided 
a  percentage  for  the  loss  of  a  hand  or  an  eye;  for  the  loss  of  both  eyes;  and  so  on. 
The  cases  are  too  numerous  to  mention,  but  it  covers  almost  everything  you  could 
think  of  in  the  case  of  an  accident,  and  it  is  figured  out  on  a  percentage.  It  runs 
all  the  way  from  a  man's  life  to  the  loss  of  a  toe  or  part  of  a  finger,  in  monthly 
payments.  It  is  figured  out  on  a  percentage  basis  of  what  his  salary  would  be. 
At  this  same  meeting  there  were  a  number  of  solicitors — not  this  one  I  attended, 
but  the  one  held  in  June — and  besides  their  speeches  in  here  they  have  filed  a  brief 
and  in  this  brief  there  is  this  Bill  that  this  gentleman  had  drafted  up.  There  was 
another  gentleman  by  the  name  of  Boyd  who  gave  some  valuable  information.  He 
is  the  Chairman  of  the  Compensation  Commission  of  the  State  of  Ohio.  He  men- 
tioned a  number  of  cases.  For  instance,  he  said,  with  accidents  on  a  railroad,  a 
good  many  people  think  the  accidents  are  all  caused  by  some  person's  negligence, 
either  the  employer  or  employee.  He  says  not.  He  has  spent  the  last  twenty- 
one  years  in  getting  statistics  along  those  lines  and  he  claims  forty-four  per  cent, 
of  the  accidents  on  railroads  are  not  to  be  avoided.  That  is,  they  cannot  be 
avoided.  They  happen  through  circumstances  that  cannot  be  foreseen,  for  instance, 
the  case  of  a  broken  rail  which  causes  the  loss  of  the  lives  of  the  employees  as  well 
as  the  travelling  public.  He  cited  a  number  of  cases  where  it  was  true  these 
accidents  had  happened  and  where  they  could  not  be  avoided.  Then  he  went  on 
to  say  that  eighteen  per  cent,  of  the  accidents  is  due  to  the  employer  and  twenty- 
eighty  per  cent,  is  due  to  the  employee.  He  had  also  figured  out  what  was  account- 
'  able  for  the  other  accidents,  but  I  didn't  get  those  statistics.  He  also  showed  at 
the  present  time  on  account  of  litigation  that  there  is  only  in  the  State  of  Ohio, 
for  instance,  eight  per  cent,  of  the  employees  who  recover  from  the  company. 
Thai  is  those  who  enter  into  litigation.  In  the  State  of  New  York  there  is  a 
trifle  over  twelve  per  cent,  recovered  from  the  railway  company,  and  I  suppose 
those  figures  will  largely  apply  to  all  countries,  Canada  as  well  as  the  United 
States.  If  that  is  the  case  there  is  a  lot  of  money  spent  that  should  not  be  spent. 
The  information  is  also  given  fo  show  there  is  only  thirty-seven  per  cent,  of  the 
money  that  is  recovered  from  the  railway  companies  that  goes  to  the  beneficiaries. 
The  rest  of  it  is  eaten  up  in  costs  and  things  like  that.  Sometimes  these  cases 
extend  over  a  number  of  years.  Now,  if  we  conld  get  something  that  would  help 
us  to  gel  away  from  Him  litigation  I  think  if  would  be  satisfactory  to  the  railway 


1912  WOKKMEN'S  COMPENSATION   COMMISSION.  L53 

employees.  That  is  our  main  object,  to  get  something  worked  out  along  the  right 
lines,  and  this  Bill  that  this  gentleman  has  provided  seems  to  be  all  right.  He 
has  provided  for  a  "Commission  to  settle  these  cases,  and  of  course  it  is  worked  out 
in  such  a  way  that  I  cannot  see  where  there  could  be  any  chance  of  fraud  in  con- 
nection with  it.  Of  course  you  can  readily  understand  if  we  can  get  away  from 
litigation  that  all  parties  interested  would  be  better  satisfied,  and  it  would  be  much 
more  satisfactory  than  at  the  present  time,  especially  to  the  henelieiaries.  Take  the 
case  of  the  widow,  for  instance,  suing  for  the  recovery  for  the  loss  of  her  husband. 
It  naturally  happens  that  the  family  has  had  distress  enough  by  the. loss  of  the 
bread-winner  without  being  necessary  for  them  to  engage  in  litigation  in  order  to 
recover  something  for  his  loss. 

I  thank  you  very  much,  gentlemen,  for  your  attention,  and  if  something 
could  be  worked  out  along  that  line  I  am  sure  that  we  as  railroad  men  would 
appreciate  it  very  much. 

The  Commissioner:  If  you  will  hand  those  books  to  the  Secretary  we  can 
have  them  before  us. 

Me.  Lawrence  :     Certainly.     You  can  keep  them  for  I  have  two  sets. 

The  Commissioner  :  As  there  seems  to  be  no  one  else  who  wishes  to  be 
heard  just  now  we  will  adjourn.  If  anybody  desires  to  be  heard  more  fully  an 
appointment  can  be  made  later  on.  I  would  like  to  know  what  date  would  be 
convenient  as  I  have  other  work  to  attend  to,  and  I  would  like  to  make  them  all  fit 
in  as  well  as  I  can.  When  will  the  body  you  represent,  Mr.  Wegenast,  be  in  a 
position  to  lay  your  views  before  me? 

Mr.  Wegenast:  I  can  hardly  say  just  now.  We  have  a  meeting  of  our 
committee  to-morrow,  and  1   could  lei  you  know  after  that. 

The  Commissioner:     We  cannot  let  it  stand  very  long. 

Mr.  Wegenast:  I  will  make  every  effort  to  expedite  matters,  but  as  I  said 
before  it  is  a  very  large  task  to  formulate  the  views  and  opinions,  and  the  desires  of 
1,800  manufacturing  concerns.  It  is  to  the  interest  of  everybody,  I  suppose,  to 
have  those  opinions  formulated  and  to  have  whatever  representations  we  make  to 
this  commission  really  represent  the  views  of  the  manufacturers  of  the  Province, 
and  it  is  only  to  that  end  that  there  may  be  some  delay. 

The  Commissioner:  When  would  you  like  to  be  heard  on  behalf  of  your 
organization,  Mr.  Gibbons? 

Mr.  Gibbons  :  I  think  the  workingmen  would  like  an  opportunity  of  meeting 
some  evening.  A  great  many  men  who  are  interested  in  this  are  working  for  their 
daily  wage  and  cannot  get  away  during  the  day,  and  if  some  evening- could  be  set 
aside  when  they  could  express  their  views  it  would  be  appreciated.  I  think  any 
evening  you  might  set  we  would  be  prepared. 

The  Commissioner:  Well,  Mr.  Kennin,  the  Secretary,  can  be  notified  and 
I  will  see  what  can  be  done. 

Mr.  Bancroft:  Is  it  the  intention  of  the  Commission  to  hold  sittings  in 
other  cities  besides  Toronto? 

The  Commissioner:   Nothing  yet  has  been  decided  as  to  that. 

Mr.  Bancroft:  We  may  have  representations  from  the  Dominion  Trades 
Congress  which  represents  over  100,000  members,  and  we  would  like  to  know  so 
that  we  can  give  you  all  the  information  we  can  at  the  most  convenient  place. 

The  Commissioner:     That  can  be  settled  later. 

I  would  like  those  who  are  interested  in  this  matter  to  consider  one  or  two 
aspects  of  the  case  that  seem  to  be  important.  Under  an  accident  system  there  is 
practically  a  guarantee  that  whatever  is  to  be  paid  as  compensation  will  be  paid. 


154  MINUTES  OF  EVIDENCE:  No.  65 

Under  the  Workmen's  Compensation  Act,,  the  British  Act,  or  any  act  I  have 
seen,  beyond  a  somewhat  meagre  provision  in  the  case  of  insolvency  there  is  no 
security,  and  if  the  man  that  is  under  the  liability  goes  to  the  wall  the  person  to 
whom  the  compensation  is  to  be  paid  loses  it  and  they  are  out  in  the  cold.  That 
does  not  follow  under  an  accident  system,  because  as  I  have  said  that  would  be 
guaranteed  as  long  as  the  thing  continued. 

Mr.  Meredith  :      By  whom  ? 

The  Commissioner:  By  the  State  in  some  cases,  the  State  taxing  the  in- 
dustry in  some  way,  or  levying  in  some  way  that  the  legislature  deems  best.  That 
aspect  I  think  is  an  important  one.  I  do  not  see  in  the  case  of  periodical  payments 
spread  over  a  number  of  years,  what  guarantee  there  is  to  the  persons  entitled  that 
they  will  surely  get  their  compensation.  If  failure  comes  the  later  it  comes  the 
worse  for  those  people,  for  they  need  the  money  most  perhaps  at  the  time  it  stops. 
That  difficulty  would  not  be  incident  to  an  accident  system,  and  it  occurs  to  me  it 
might  be  possible  to  have  a  scheme  on  the  lines  of  the  legislation  of  the  State  of 
Washington,  or  partly  along  those  lines.  Of  course  I  cannot  say.  I  don't  know 
whether  the  State  would  be  willing  to  take  that  matter  up. 

Then  there  is  another  matter  which  the  gentlemen  might  consider.  It 
would  occur  to  one  that  if  in  one  province  an  industry  is  handicapped  by  a  greater 
liability  than  in  another  province,  that  industry  will  compete  at  so  much  dis- 
advantage with  the  other  industry.  I  do  not  know  whether  under  our  constitu- 
tional system  it  would  be  practicable,  or  if  practicable  whether  it  would  be  desirable 
that  there  should  be  a  Dominion  law  of  compensation  applicable  to  the  whole  country. 
I  would  like  you  to  consider  that.  I  am  not  throwing  it  out  as  a  view  I  have  at  all, 
but  merely  as  a  matter  which  might  properly  be  considered.  I  have  heard  it  said 
that  the  manufacturers  do  not  object  to  compensation,  but  they  do  object  to  their 
being  handicapped  with  greater  compensation  than  their  competitors  in  other 
provinces.  I  suppose  any  measure  to  be  satisfactory  must  be  a  fair  one  and  we 
must  look  at  all  sides  of  the  case,  and  I  want  you  gentlemen  who  are  of  the  army 
of  industry  to  consider  these  aspects  of  the  case  as  well,  and  let  me  know  if  you  do 
not  agree  with  the  argument  what  your  reasons  are  for  differing  from  it,  because  I 
assume  that  you  will  not  differ  unless  you  have  a  reason  for  differing. 

Mr.  Bancroft  :  It  might  be  well  to  have  sessions  where  the  manufacturers' 
representatives  and  the  representatives  of  organized  labour  could  meet  the  Com- 
missioner. 

The  Commissioner  :     I  would  like  to  see  them  face  to  face. 

You  mentioned  something  about  private  meetings,  and  I  don't  know  what  that 
means.  It  does  not  mean  surely  that  representations  are  to  be  made  on  behalf  of 
anybody  that  are  not  public  representations? 

Mr.  Bancroft  :  If  I  made  any  reference  to  a  private  session,  I  meant  private 
sessions  held  by  yourself  where  representatives  of  the  different  organizations  could 
state  their  ideas,  that  was  all. 

The  Commissioner:  Every  meeting  I  hold,  unless  I  see  some  reason  to 
change  my  present  view,  will  be  public  where  everybody  shall  have  a  right  to  be 
heard.  Perhaps  you  gentlemen  can  arrange  some  time  that  will  be  convenient  foT 
both  of  you.  However,  do  not  let  U3  waste  time,  if  I  may  use  that  expression, 
because  we  want  to  get  at  some  result,  and  unless  something  can  be  got  ready  in 
time  to  be  considered  before  the  House  meets  nothing  can  be  done.  The  House 
usually  meets  in  January  or  February.  I  may  call  another  meeting  such  as  this 
even  if  I  get  no  intimation  such  as  I  ask  for. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  155 


SECOND  SITTING 


Legislative  Building,  Toronto. 

Friday,  27th  October,  1911,  11  a.m. 

Present:     Sir  William  E.  Meredith,  Commissioner. 
Mr.  F.  N.  Kennin,  Secretary. 
Mr.  W.  B.  Wilkinson,  Law  Clerk. 

The  Commissioner:     I  have  received  a  communication  from  the  Dominion 
Minister  of  Labour  which  the  Secretary  might  read. 

The  Secretary  read  a  letter  from  Mr.  Thomas  E.  W.  Carruthers,  Minister  of 
Labour,  to  Sir  William  B.  Meredith,  dated  25th  October,  1911. 

The  Commissioner:  When  the  Commission  adjourned  on  Monday  it  was 
understood  that  the  persons  interested  would  meet  and  arrange  a  suitable  time  or  a 
convenient  time  for  a  hearing  of  their  interests,  so  that  persons  upon  both  sides 
would  be  present  at  the  same  time,  and  we  are  here  in  answer  to  their  desire  to  hear 
what  they  have  to  say.  The  day  before  yesterday,  Mr.  Wegenast,  representing  the 
Manufacturers'  Association,  called  me  up  and  said  that  the  Association  was  not 
prepared  to  lay  its  views  before  the  Commission,  and  intimated  that  some  delay 
would  be  necessary,  not  saying  what  delay.  I  told  him  I  could  not  deal  with  the 
matter  except  publicly  and  that  I  would  call  a  meeting  for  to-day  when  any  repre- 
sentations that  the  Association  desired  to  make  could  be  dealt  with.  Mr.  Wegenast 
intimated  that  the  Association  had  relegated  the  matter,  as  far  as  it  was  concerned, 
to  a  committee  consisting,  I  think,  of  Mr.  P.  W.  Ellis>  Mr.  Gourlay,  and  Mr. 
Gr.  M.  Murray,  the  general  secretary  of  the  Association. 

Mr.  Wegenast  :  Mr.  Murray  and  Mr.  Gourlay  are  here,  but  Mr.  Ellis  cannot 
be  here  to-day,  unfortunately. 

The  Commissioner  :     I  am  ready  to  hear  anything  the  Association  has  to  say. 

Mr.  Wegenast:  I  suppose  it  devolves  upon  me  to  open  the  matter.  As 
your  Lordship  has  stated  the  object  was  to  have  a  committee  wait  upon  your  Lord- 
ship to  explain  the  attitude  of  the  Association  on  certain  phases  of  the  inquiry. 
Unfortunately  the  Chairman  of  the  sub-committee  could  not  be  here  to-day  as  he 
is  engaged  at  a  meeting  of  the  Niagara  Falls  Park  Commission  at  Niagara  Falls. 
It  may  not  be  amiss  to  state  that  Mr.  Murray,  as  your  Lordship  is  aware,  is  a 
member  of  the  Dominion  Technical  Education  Commission,  and  he  is  here  only  by 
sacrificing  his  attendance  on  a  week's  sittings  of  this  Commission  in  the  New 
England  States.  I  say  this  in  view  of  the  request  that  we  are  making  for  further 
time  in  which  to  consider  this  matter.  As  the  resolution  of  the  Association  sets 
forth  the  Association  is  prepared  to  go  into  this  question  in  the  fullest  manner  that 
anybody  could  desire.  I  need  not  state  that  the  question  of  compensation  involves 
further  considerations  of  what  might  be  termed  a  conservation  of  industrial  effic- 
iency, to  which  Mr.  Carruthers  alludes,  and  also  to  a  very  large  extent  the  economic 
welfare  of  the  country  generally.  I  need  not  perhaps  elaborate  either  on  this  phase 
of  the  situation,  that  the  Province  of  Ontario  is  in  a  unique  position  to  deal  with 
this  question.  Apart  from  the  Chamberlain  Act  of  1885,  which  was  introduced 
here  in  the  Act  of  1885,  the  ground  is  absolutely  clear  for  the  adoption  of  any 
scheme  of  legislation  and  compensation  that  may  seem  best.     We  stand  in  this 


156  .  MINUTES  OF  EVIDENCE:  No.  65 


unique  position  that  we  are  the  only  jurisdiction  that  has  not  adopted  legislation  of 
some  kind,  with  the  exception  of  the  American  States,  which  are  hampered  by  their 
constitutional   restrictions,   and   find  themselves   in  a    very  much   less  favourable 
position  than   we   do.        Taking   that    view    of   the   matter   perhaps   our   Associa- 
tion may  be  pardoned  for  assuming  that  it  is  intended  to  make  the  whole  inquiry  a 
most  thorough  one  into  all  the  phases  of  the  subject.     I  think  we  are  not  going  too 
far  in  assuming  that  under  any  circumstances.        We  have   also   the   advantage 
of  the  accumulation  of  experience  during  the  past  thirty  or  forty  years  in  other 
jurisdictions.     We   have   that  experience   available   in  an   immense  mass   of  data, 
which  has  to  be  gone  through  by  anyone  to  realize  its  real  importance,  as  your 
Lordship  knows.    Eleven  years  ago  the  Government  of  Ontario  appointed  Professor 
Mavor,  of  the  University,  as  a  Commissioner  to  report  to  the  Government  on  the 
question,  and  the  gist  of  his  report  was  that  the  time  was  not  opportune  then  for 
going  into  the  question.     The  paragraph  giving  his   general   conclusion   is   this: 
"  On  all  grounds  so  far  as  any  definite  conclusion  is  suggested    by  the  foregoing  it 
would  appear  to  be  wise  to  wait  for  some  time  in  orler  to  ascertain  more  fully 
what  has  been  the  effect  in  the  c^arae  in  the  English  law,  and  ascertain,  also, 
whether  the  change  in  the   German  legislation   or  otherwise  be   not  amended  in 
England."     The  matter  has  now  rested  for  eleven  years,  and  data  has  accumulated 
so  that  now  it  consists  of  an  immense  mass  of  reading  for  anyone  who  undertakes 
to     intelligently     discuss     the     subject.       Recognizing    these    phases,    I    was    in- 
structed   by    the    committee    of   the    association,    when    your    Lordship    was    first 
appointed,  to  write  your  Lordship  offering  the  co-operation  of  the  Association  in  any 
manner  in  which  your  Lordship  thought  we  could  be  of  any  assistance.     That  offer 
was  repeated  from  time  to  time  and  responded  to  by  your  Lordship,  ..with  the  assur- 
ance that  in  due  time  we  would  be  called  upon  and  advised  as  to  your  Lordship's 
wishes.     I  have,  being  in  charge,  to  report  to  the  parliamentary  committee  who 
were  then  taking  up  the  matter  from  time  to  time,  your  Lordship's  attitude  in  the 
matter,  and  we  have  been  waiting  the  proper  time  for  taking  the  matter  up.     Now. 
without  unduly  magnifying  the  part  that  it  is  possible  for  the  Association  to  play 
in  the  matter,  we  recognize  the  fact  that  we  have  in  our  power  as  an  organization 
to  serve  your  Lordship  to  a  considerable  extent ;  in  the  first  place,  by  collecting  and 
formulating  the  opinions  of  the  members  of  the  Association;  and  I  presume  if  this 
work  were  not  done  by  our  organization  it  would  devolve  upon  your  Lordship  to 
hear    individual    members    and    to    formulate   these    opinions    and    views    for   the 
Commission.     We  are  also  in  a  position  to  give  information  to  our  members.   Your 
Lordship  is  well  aware  that  this  is  a  subject  which  it  is  scarcely  possible  to  intelli- 
gently discuss  without  having  some  idea  of  what  has  been  done  in  other  jurisdic- 
tions, and  we  are  in  a  position  to  take  up  the  whole  question  from  that  standpoint 
Avith  our  members.     On  the  other  hand  we  are  in  a  position  as  an  organization  to 
carry  on  negotiations  with  those  who  represent  what  we  may  term  the  other  side 
of  the  question.     But  apart  from  this  it  has  been  suggested,  and  we  have  thought 
it  might  be  possible,  that  the  Association's  organization  might  be  utilized  in  an 
administrative  manner.     Your  Lordship  has  suggested'  for  example,  why  couldn't 
the  Manufacturers'  Association  lake  up  the  question  along  insurance  lines?     Now, 
whatever  the  attitude  of  the  Association  might  be  on  any  suggestion  of  that  kind. 
it    would   be  a   question    which    would  require   the   most    careful   and   most  mature 
deliberation  of  those  in  charge  of  our  organization.     We  realize  this  too.    We 'do 
not  wish  to  unduly  emphasize  it,  but  there  is  not,  I  think,  in  any  jurisdiction  in  the 
world  to-day  an   organization  corresponding  precisely  to  ours  in   this  Dominion. 
I  say  that  without  undue  pride,  rather  with  a  sense  of  our  responsibility.     When 


1912  WOWK  MUX'S  COMPENSATION   COMMISSION.  157 

the  German  Act   was  framed   in    L884,  the  Government  of  Germany  had  to  deal 
with  some   forty   or    fifty   organizations    representing    manufacturing    interests — 
perhaps   not    all   representing   manufacturing   interests,   but   at   least  some  thirty 
manufacturing  organizations.     We   arc    in    a    unique    position   in    this   respect   in 
Canada.     I  do  not-  think  there  is  another  jurisdiction   where  there  is  an  organi- 
zation of  corresponding  size  to  thai   of  the  Canadian    Manufacturers'  Association. 
We  have  as  I  say,  without  unduly  arrogating  to  ourselves  any  importance  that  we 
are  not  entitled  to,  tried  to  look  upon  the  whole  matter  with  a  sense  of  respons- 
ibility  commensurate   with   our  opportunity.        While   we   have   certain   facilities 
for  assisting  your  Lordship  in  the  discussion  and  perhaps  in  the  practical  carrying 
out  of  whatever  scheme  is  adopted,  it  would  have  been    presumptuous    for    us    to 
anticipate  the  course  of  this  inquiry,  or  the  attitude  of  your   Lordship,  or  the 
attitude  of  those  who  will  represent,   the  wage-workers'  interests,  by  a  premature 
discussion,  or  by  a  premature  formulating  of  opinion.     If  we  had   anything  for 
instance,  in   the  shape  of  the  suggestion  which  your  Lordship  threw  out  at  the 
first  sitting  of  the  Commission,  that  is,  for  instance,  the  suggestion  of  the  Act  of 
the  State  of  Washington,  or  the  suggestion  of  Dominion  legislation,  or  a  suggestion 
of  a    further  development  of  the  British    Act   so  as  to  include  some  guarantee  of 
solvency — if  we  had  had  anything  of  that  kind  to  discuss  we  would  have  been  in  a 
position  to  take  the  matter  up;  but  any  one  of  half  a  dozen  or  a  dozen  very  large 
phases  of  the  subject  may  call  for  extended  deliberation  and  most  careful  con- 
sideration on  the  part  of  the  Association,  before  the  Association's  position  could 
in  the  nature  of  things  be  stated.     Your  Lordship  will  understand  my  own  position 
personally  in  the  matter.     I  would  be  called  upon  to  answer  question  after  question 
and  to  state  the  position  of  the  Association  on  these  matters,  and  it  is  in  the  nature 
of  things  an  impossibility  for  us  to  assume  the  responsibility  of  doing  that  without 
sufficient  time  for  securing  instruction.     If    I  had   attempted   to  anticipate  your 
Lordship's  views,  which  I  think  T   had  no  right  to  do.  or  if  I  had  presumed  to 
anticipate  the  course  of  the  discussion.  I  know  now  that  I  would  have  been  entirely 
mistaken,  and  that  any  discussion  which  the  Association  would  have  entered  upon 
at  my  instance  would  have  been  entirely  wide  of  the  mark.     As  a  matter  of  fact 
I  have  feared  that  our  Association  may  have  gone  too  far  as  it  is.     We  have  issued 
certain  circulars,  certain  publications,  to  our  members.     We  had  here  in  connection 
with  our  annual  meeting  a  lecture  in  which  the  lecturer  advocated  certain  lines  of 
activity.     I  have  thought  that  perhaps  we  made  a  mistake  in  going  so  far  as  that, 
and   that  we  have  possibly  misled  the  public  and  the  labour  interests  as  to  our 
attitude  in  the  matter,  whatever  it  will  develop  into.       My  opinion  is  not  that  we 
should  have  had  some  expression  of  opinion  from  your  Lordship  or  from  the  labour 
interests  as  to  what  their  desires  were,  or  what  line  of  policy  would  be  adoptedl,  or 
what  type  of  legislation  the  labour  interests  would  ask  for.    My  point  is  this,  that 
when  the  matter  has  reached  the  stage  of  propositions  or  the  presentation  of  views, 
it  will  require  a  considerable  length  of  time  for  discussion  and  counter  proposition. 
I  gathered  from  your  Lordship's  remarks  that  it  is  intended  to  report  at  the  coming 
session  of  the  legislature.      We,  on  our  part,  will  undertake  to  do  everything  that 
is  possible  to  assist  your  Lordship,  and  do  our  part,  whatever  it  may  be,  in  this 
inquiry  to  enable  your  Lordship  to  report  within  that  time,  but  personally  I  cannot 
see  how  it  is  possible  for  us  to  put  our  matter  in  shape  within  that  time.     I  am  not 
prepared  to  urge  anything — I  am  prepared  to  undertake  what  seems  to  me  im- 
possible, but  I  thought  it  was  only  fair  at  this  stage  of  the  inquiry  to  place  our 
views  on  that  phase  of  the  question  before  your  Lordship.     Now,  your  Lordship  has 


158  MINUTES  OF  EVIDENCE:  No.  65 


also  suggested  the  possibility  of  our  getting  together  with  the  labour  interests  and 
eliminating  a  large  part  of  the  discussion  by  mutual  agreement  on  certain  questions. 
The  Commissioner  :     I  didn't  suggest  anything  of  the  kind. 
Mr.  Wegenast  :     Well,  it  has  been  suggested. 

Mr.  Bancroft:     By  whom  was  it  suggested?     Was  it  his  Lordship,  or  the 
labour  men,  or  was  it  the  manufacturers? 

Mr.  Wegenast:  Well,  my  recollection  of  it  is  that  his  Lordship  said,  Why 
can't  you  people  work  out  some  scheme  that  would  be  mutually  satisfactory  ?  That 
is  as  far  as  his  Lordship  went  in  the  matter.  I  understood  that  of  course  to  be  an 
intimation  that  his  Lordship  desired  something  of  the  kind,  and  I  took  steps  im- 
mediately and  reported  so  to  his  Lordship,  that  I  had  approached  the  representa- 
tive men  who  are  supposed  to  represent  the  labour  interests  to  that  end.  That  was 
over  a  year  ago,  and  I  have  not  heard  of  it  since.  I  said  of  course  that  it  was 
hardly  our  place,  whatever  our  desires  were,  to  press  the  matter,  but  I  said  we  were 
willing  to  negotiate,  and  I  stated  that  in  this  room  again  on  Monday  to  Mr.  Ban- 
croft, that  we  are  willing  to  meet  them.  In  fact  so  far  as  it  was  proper  for  us 
we  were  anxious  to  meet  them,  because  I  couldn't  see  that  any  possible  harm 
could  come  to  anyone  from  a  mutual  discussion,  and  there  was  a  possibility  of  great 
gain  by  having  discussion  on  certain  points.  Then  we  have  thought  that  it  might 
be  possible  to  secure  conferences  of  the  employers  other  than  the  manufacturers, 
who  only  represented  a  proportion.  Mr.  Murray,  the  Secretary  of  the  Manufacturers' 
Association,  is  here,  and  he  may  have  something  to  say  on  that  point.  I  think  it 
is  possible  to  secure  some  degree  of  uniformity  amongst  the  employing  interests  in 
all  these  matters.  Of  course  I  can't  help  feeling  that  I  have  done,  and  the  Asso- 
ciation has  done,  a  little  more  than  its  share,  and  it  seems  the  irony  of  fate  that  I 
should  now  be  placed  in  a  position  of  not  being  ready  to  do  enough.  The  immediate 
occasion  of  my  appearing  before  your  Lordship  is,  that  I  had  arranged  before  the 
announcement  of  your  Lordship's  first  sitting  to  go  to  British  Columbia  on  an  im- 
portant Commission  there.  I  was  to  have  been  there  on  the  10th  of  November,  but 
I  received  a  wire  last  night  which  informs  me  that  it  would  be  possible  to  expedite 
the  matter  by  appearing  there  on  the  6th.  However,  as  with  Mr.  Murray  who  has 
sacrificed  his  other  engagements,  I  am  prepared  to  do  what  I  can  to  work  the  matter 
out,  and  if(  necessary  I  suppose  I  shall  have  to  choose  between  the  two  engagements 
and  another  man  will  have  to  be  appointed  for  one  of  them,  although  as  a  matter  of 
fact  they  are  matters  which  I  have  had  in  charge  for  a  year  and  a  half,  and  which  it 
would  be  very  difficult  for  anybody  else  to  take  up.    That  is  in  brief  the  position. 

The  Commissioner:     I  have  not  yet  learned  what  is  your  position.       You 
have  not  indicated  what  you  want. 

Mr.  Wegenast:     What  we  desire  is  more  time. 

The  Commissioner  :     That  is  indefinite.     Do  you  want  a  year  or  do  you  want 
a  month,  or  what  do  you  want? 

Mr.  Wegenast:     Well,  it  is  as  difficult  to  state  what  length  of  time  will  be 
required  as  it  is  to  discuss  the  matter. 

The  Commission er:  You  have  had  sixteen  months  since  this  Commission 
was  appointed  in  which  to  get  your  material  ready,  and  I  do  not  understand  at  all 
that  it  is  possible  you  could  have  been  lying  on  your  oars  all  that  time  doing  nothing. 
You  knew  all  the  phases  that  were  being  discussed.  Nobody  knows  them  better 
than  you,  and  the  different  methods  of  dealing  with  this  question,  and  it  has  been 
possible  in  that  time  for  the  Commission  to  gather  a  great  deal  of  information  from 
all  parts  of  the  world.  T  do  not  know  what  the  Manufacturers'  Association  has  been 
doing  if  it  has  not  also  boon  engaged  in  that  work?     Now,  there  can  be  no  trifling- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  159 


with  the  work  of  this  Commision.  There  was  legislation  introduced  before  the 
Commission  was  appointed  looking  to  the  adoption  of  the  British  Act.  I  think 
two  Bills  were  introduced,  and  the  House  thought  it  better  not  to  pass  upon  those 
until  an  inquiry  had  been  made  by  a  Commission.  The  result  was  the  appointment 
of  this  Commission.  It  would  be  out  of  the  question  I  think  that  the  session 
should  meet  without  any  report  from  this  Commission.  While  I  am  quite  willing 
to  give  every  reasonable  facility  to  everybody  that  is  interested  to  present  his  views, 
•I  am  bound  to  have  my  report  before  the  House  sometime  during  the  session  at  all 
events;  that  is  a  sine  qua  nan.  I  think  it  would  be  trifling  with  the  question 
if  that  were  not  done. 

Mr.  Wegenast  :  Of  course,  as  your  Lordship  has  stated,  I  have  had  an  oppor- 
tunity of  gathering  this  information  and  to  no  small  degree  have  placed  all  the 
information  which  I  have  at  the  command  of  the  Secretary  of  the  Commission,  and 
I  am  willing  to  place  anything  I  have  and  anything  that  I  know  at  the  command  of 
the  other  interests  concerned,  but  that  is  a  different  matter  from  committing  an 
Association  and  an  organization  like  ours  to  lines  of  policy  which  may  possibly 
require  entire  reorganization.  The  suggestion  for  instance  of  Dominion  legislation 
was  a  matter  which  I  had  not  personally  considered,  except  as  the  remotest 
possibility. 

The  Commissioner:  That  is  outside  the  scope  of  this  Commission.  I  am 
to  report  legislation  that  is  competent  for  the  legislature  of  this  Province  to  pass. 
AVhatever  recommendation  might  be  made  it  would  be  outside  the  direct  line  of  the 
mandate  I  have. 

Mr.  Wegenast:  That  was  of  course -the  view  I  took  of  the  matter.  My  point 
is  this,  that  it  is  impossible  for  the  Association  to  pronounce  on  phase  after  phase 
of  the  question  of  workmen's  compensation  that  will  arise  as  the  discussion  proceeds. 

The  Commissioner:  You  have  had  the  British  Act  before  you  and  its  oper- 
ation for  nearly  five  years,  and  surely  you  know  what  it  means? 

Mr.  Wegenast:  My  point  is  that  while  I  may  be  personally  able  to  give  a 
personal  opinion,  this  inquiry,  so  far  as  I  am  concerned,  cannot  be  conducted  like  a 
law  suit  in  which  I  can,  off  hand,  commit  the  Association  on  every  phase  that  comes 
up  in  which  the  policy  of  the  Association  will  have  to  be  enunciated.  It  will  re- 
quire fresh  instructions  from  time  to  time,  and  the  question  of  what  length  of  time 
it  will  take  is  a  matter  which  I  am  not  competent  to  say. 

The  Commissioner:  I  think,  Mr.  Wegenast,  you  will  have  to  make  your 
arrangements  so  that  if  you  have  any  views  to  present  they  will  be  presented  in  time 
for  the  report  to  be  made  to  the  legislature  at  the  next  session. 

Mr.  Wegenast:  Mr.  Murray,  the  general  secretary  of  the  Association,  is 
here,  with  Mr.  Grourlay  and  Mr.  Fleming. 

The  Commissioner:  I  shall  be  glad  to  hear  what  any  or  all  of  these  gentle- 
men have  to  say. 

Mr.  Murray:  Your  Lordship.  I  appear,  as  Mr.  Wegenast  has  stated,  in  my 
capacity  as  secretary  of  the  Canadian  Manufacturers^  Association.  To  begin  with 
perhaps  it  might  be  in  order  for  me  to  intimate  to  you  just  what  that  Association 
stands  for  in  the  industrial  life  of  Canada.  It  is  an  organization  which  covers  in 
a  general  way  the  entire  manufacturing  field  in  this  country.  Its  members  are 
located  in  every  province  of  the  Dominion,  and  the  industries  which  it  embraces 
cover  practically  every  type  of  manufacture  that  is  carried  on  within  this  country. 
As  regards  the  Province  of  Ontario,  in  which  perhaps  you  are  more  directly  inter- 
ested, I  may  say  that  we  embrace  within  our  organization  approximately  1,600 
separate  and  distinct  manufacturing  establishments.     These  carry  representation 


Kill  MINUTES  OF  EVIDENCE:  Xo.  65 

in  all  the  important  points  of  the  Province,  and  so  as  in  the  case  of  the  Dominion, 
i  hey  also  cover  practically  all  the  types  of  manufacturing  operations  that  are  carried 
on  in  the  Province.     This  subject  of  compensation  therefore  is  one  which  inter- 
ests us  very,  very  deeply.       It  is  a  subject  on  which  we  have  been  carrying  on 
investigations  for  a  number  of  years.     I  think  it  is  fully  five  years  ago  that  we  first 
began  looking  into  the  British  Act  and  studying  its  operation.    Commissions  were, 
as  you  know,  appointed  in  the  Province  of  Quebec  and  in  the  Province  of  Manitoba 
to  introduce  new  legislation  on  the  subject  there.     Our  branches  in  those  provinces 
on  their  own  initiative  without  waiting  for  direction  from  our  governing  body, 
undertook  to  formulate  views  for  presentation  to  those  Commissions.     In  the  main, 
1  think  those  views  will  find  sympathy  with  the  governing  body  of  our  Association, 
but  there  are  certain  features  of  the  legislation  which  has  followed  the  work  of  the 
commission  in  those  two  provinces  which  have  not  been  entirely  satisfactory  either 
to  the  manufacturer  and  employing  interests  or  to  the  employee.     We  feel  we  ought 
to  profit  by  the  experience  of  other  provinces  as  well  as  by  the  experience  of  other 
countries.     It  is  true  perhaps  that  our  investigations  on  this  subject  were  carried 
on  more  or  less  spasmodically  for  a  time,  but  realizing  the  necessity,  if  anything  of 
a  satisfactory  nature  was  ever  to  be^accomplished,  of  getting  down  to  a  systematic 
basis  and  prosecuting  our  inquiries  in  a  thorough  manner,  we  instituted  some  six- 
teen or  eighteen  months  ago  a  legal  department  in  connection  with  our  Association, 
and  retained  Mr.  Wegenast  to  look  after  its  affairs.     It  is  true  that  that  department 
has  not  been  able  to  specialize  itself  altogether  on  this  one  subject  of  compensation. 
We  have  had  other  matters  to  deal  with  which  certain  members  of  our  Association 
would  consider  of  equal  importance.     I  need  only  mention  the  subject  of  extra- 
provincial  corporation  legislation.     However,  T  can  say  this  in  all  truthfulness  that 
a  very  large  portion  of  Mr.  Wegenast's  time  in  the  last  sixteen  months  has  been 
devoted  to  compiling  information  on  this  subject,  and  the  collection  of  opinions 
from  those  who  are  familiar  with  the  operation  of  the  laws  of  other  provinces  and 
other  states  and  other  countries.     After  he  had  collected  a  great  deal  of  this  infor- 
mation a  summary  of  it  was  prepared.     It  was  printed  and  sent  out  to  the  members 
of    our    organization    throughout    the    Province    of    Ontario,    with    the    request 
that    they    should    get    thinking    along   these    lines    with    a    view   to    formulating 
their  opinions  for  this   Commission.       Under  instructions  from   our  Association 
Mr.    Wegenast    went    to    New    York    to    attend    the    New    York    meeting    of 
the  Manufacturers  of  the  United  States,  in  order  that  he  might  consult  with  their 
officers  and  find  out  how  they  were  viewing  the  question,  and  obtain  the  benefit  of 
their  experience.     He  there  made  arrangements  to  bring  to  Toronto  for  the  annual 
meeting  of  our  own   manufacturers  a  lecturer,  who  has  himself  spent  nearly  two 
years  in  the  investigation  of  this  subject,  not  simply  by  reading  reports  and  Acts, 
but  by  visiting  foreign  countries  and   studying  conditions  at  first  hand.     On  the 
whole  we  have  conducted  a  campaign  of  education  so  that  we  could  bring  the  manu- 
facturers to  a  proper  appreciation  of  the  importance  of  this  subject,  and  the  pos- 
sibilities of  it.     The  upshot  of  it  was  that  at  our  annual  meeting  held  two  weeks  ago 
in  this  city  a  special  committee  was  appointed  to  work  upon  the  data  which  Mr. 
Wegenast  has  collected.     That  committee  consists  of  representative  manufacturers 
from  all  parts  of  this  Province.     They  have  already  held  a  meeting  to  which  they 
have  come  at  their  own  expense  and  without  compensation  of  any  kind,  and  they  are 
prepared  to  continue  those  meetings  just  as  frequently  as  circumstances  will  permit. 
They  have  already  made  progress  to  the  extent  of  drawing  up  a  tentative  declaration 
of  principles.     I  am  sorry  I  am  not  at  liberty  to  say  just  at  present  what  thai 
declaration  of  principles  contains,  because   it    has   not   been   approved   by  the  com- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  161 


mittee,  and  it  would  be  presumption  on  my  part  to  anticipate  what  the  committee 
may  decide  upon.  1  may  say  this,  however,  that  there  has  been  apparent  through- 
out the  discussion  a  desire  to  substitute  the  present  system  of  liability  insurance  for 
some  form  of  accident  insurance,  whereby  those  who  are  injured  in  the  course  of 
their  employment  would  receive  a  reasonable  compensation  without  having  to  have 
recourse  to  legal  process.  That  is  one  tendency  which  I  feel  justified  in  saying  I 
have  observed. 

The  Commissioner:     What  does  that  mean,  Mr.  Murray? 

Mr.  Murray:  Possibly,  your  Lordship,  I  can  explain  it  by  reference  to 
another  matter.  Feeling  the  injustice  of  forcing  those  who  are  injured  to  fight  for 
every  cent  of  compensation  which  they  may  get  as  a  result  of  their  injury,  a  number 
of  our  manufacturers  have  formulated  an  insurance  scheme  of  their  own.  In  the 
formulation  of  these  schemes  they  have  consulted  their  employees.  In  some  cases 
they  are  bearing  the  entire  cost  themselves,  and  in  other  cases  a  small  portion  is 
contributed  by  the  employees,  but  I  can  instance  a  number  of  establishments  in  this 
city  and  in  outside  cities,  where  such  schemes  are  in  effect  and  where  they  are  work- 
ing out  to  the  satisfaction  of  both  employers  and  employees.  Now,  sir,  it  has  been 
suggested  that  in  the  extension  of  that  system  there  should  be  organized  among  the 
manufacturers  of  this  Province  a  large  mutual  accident  insurance  company,  in 
which  every  manufacturer  would  insure  his  pay-roll,  not  in  the  way  of  a  liability 
insurance  to  fight  claims  for  compensation,  but  to  insure  it  in  such  a  way  that  those 
who  are  injured  will  immediately,  upon  proof  of  the  accident,  receive  the  com- 
pensation to  which  they  are  entitled.  I  may  say  further  that  I  think  that  scheme 
is  viewed  with  very  general  favour  by  the  manufacturers.  I  need  not  remind  you 
that  less  than  four  years  ago  the  suggestion  was  made  that  we  should  organize  a 
mutual  fire  insurance  company  among  the  members  of  our  association,  and  we  did 
it,  and  what  we  have  done  in  that  direction  we  can  do  in  the  direction  of  accident 
insurance  if  we  make  up  our  minds  to  do  it.  We  are  now  merely  discussing  the 
advisability  of  it  and  as  soon  as  that  question  is  decided  then  we  are  ready  for  action. 
But  here  we  are  confronted  with  this  question:  will  our  efforts  along  that  line  be 
acceptable  to  this  Commission,  or  to  the  Government  to  which  this  Commission  will 
report?  In  order  to  organize  a  mutual  accident  insurance  company  a  great  deal 
of  time  and  effort  and  money  will  be  necessary.  To  begin  with  we  are  confronted 
with  an  embarassing  lack  of  statistics  on  the  subject  of  accidents  and  causes  con- 
tributing to  them.  Before  we  can  intelligently  classify  industrial  risks  and  base 
rates  of  insurance  we  must  have  the  full  statistics,  and  those  statistics  have  not 
been  compiled  by  any  authority  in  this  country,  and,  therefore,  it  will  be  for  us  to  do 
pioneer  work  in  that  field.  The  present  basis  of  liability  insurance  rates  is  so  vague 
that  the  liability  insurance  companies  themselves  will  not  divulge  what  it  is.  As 
I  say,  therefore,  we  are  in  some  doubt  as  to  whether  our  efforts  along  that  line 
would  be  acceptable.  We  would  welcome  any  direction  that  this  Commission  might 
give  to  our  efforts,  and  on  behalf  of  the  manufacturers  personally  and  our  Associa- 
tion I  can  assure  you,  sir,  that  we  will  bend  our  best  energies  to  the  solution,  or  at 
least  to  the  formulation  of  onr  ideas,  upon  any  line  of  policy  which  you  might  see 
fit  to  indicate.  As  regards  the  question  of  time,  I  regret  exceedingly  that  I  cannot 
state  just  how  much  time  might  be  required,  but  I  can  say  that  even  as  the  manu- 
facturers have  not  dallied  with  this  question  since  the  time  when  we  inaugurated 
our  legal  department,  about  a  year  and  a  half,  or  a  year  and  four  months  ago,  we 
will  continue  to  prosecute  our  inquiry  with  all  the  diligence  of  which  we  are  capable, 
and  I  can  conceive  that  it  might  be  possible  for  us  to  have  our  recommendations  in 
shape  to  lay  before  you  in  time  to  permit  of  a  report  being  presented  to  the  next 
session  of  this  legislature,  providing  some  direction   is  given  to  our  inquiry. 

11    L. 


162  MINUTES  OF  EVIDENCE:  Xo.  65 


The  Commissioner  :  How  would  it  be  possible  for  any  direction  to  be  given  ? 
Conclusions  have  to  be  reached  before  any  direction  can  be  given,  and  conclusions 
cannot  be  reached  until  the  whole  subject  has  been  considered.  Surely  it  would  be 
quite  competent  for  the  Manufacturers'  Association  if  they  favoured  a -system  of 
mutual  insurance  of  all  their  employees  to  say  that,  without  elaborating  all  the 
details.  You  need  not  go  into  that  now,  one  would  think,  for  the  purposes  of  this 
Commission.  I  suppose  you  could  very  soon  determine  whether  it  would  be  ben- 
eficial and  a  feasible  scheme  to  form  a  company  of  that  kind.  It  would  not  take 
long  to  determine  that. 

Mr.  Wegenast:     We  have  the  manager  of  our  Insurance  Department  here. 

The  Commissioner  :  The  State  of  Washington  evidently  had  to  grapple  with 
that  because  it  has  adopted  State  insurance  with  a  graduated  tax  upon  the  manu- 
facturers, and  that  of  course  must  be  based  upon  the  same  considerations  as  would 
be  involved  in  a  scheme  of  mutual  insurance.  I  don't  know  anything  about  the 
basis,  whether  it  is  a  fair  one  or  not. 

Mr.  Murray:  On  that  point  I  might  state,  sir,  that  I  would  not  anticipate 
any  difficulty  in  obtaining  an  expression  of  opinion  from  the  special  committee  of 
our  Association  having  the  matter  under  investigation  within  the  next  month. 

The  Commissioner  :  Supposing  that  was  considered,  as  far  as  that  branch 
was  concerned,  a  fair  method  of  dealing  with  the  matter,  what  about  the  other  large 
interests  involved?  While  that  is  a  very  considerable  portion  of  the  industrial 
army  it  is  only  a  part  of  it.  What  about  the  part  that  Mr.  Merrick  represents? 
What  would  you  do  about  the  other  organizations  not  coming  within  the  scope  of 
your  organization  ? 

Mr.  Murray:  That  is  one  of  the  reasons  we  feel  that  time  is  necessary, 
uecause  any  ideas  we  may  have  to  advance  ourselves  will  only  be  on  behalf  of  the 
manufacturers,  and  we  would  prefer  to  come  before  you  with  suggestions  which  we 
know  would  be  acceptable  io  other  employing  interests,  and  if  possible  to  the  labour 
interests  as  well. 

The  Commissioner  :  The  effect  of  the  British  Act  is  practically  to  make  the 
manufacturer  an  insurer  of  his  men,  unless  the  man  by  serious  misconduct  has  to 
suffer  the  loss,  if  the  injury  takes  place  in  the  course  of  his  employment.  Is  that 
not  individual  insurance? 

Mr.  Murray:  Of  course  that  is  a  form  of  insurance,  but  we  would  like  to 
approach  the  subject  from  an  entirely  different  standpoint. 

The  Commissioner  :  Do  not  misunderstand  me.  I  want  all  the  information 
I  can  get,  but  I  do  not  want  any  undue  delay  in  reaching  a  conclusion.  Something 
ought  to  be  done.  I  do  not  suppose  that  what  is  reported  and  what  is  done,  if  any- 
thing is  clone,  by  the  legislature  will  be  final.  We  are  moving  on  all  the  time,  but 
the  tiling  is,  if  the  law  is  in  a  bad  shape,  to  get  it  in  a  better  position.  Let  us 
make  a  step  onward. 

Mr.  Murray:  All  I  can  state,  your  Lordship,  is  that  on  behalf  of  our  Associa- 
tion I  will  give  you  an  undertaking  that  this  matter  will  be  pushed  in  our  committee 
jusl  as  diligently  as  it  is  possible  for  anyone  to  push  it.  We  have  already  post- 
poned other  work  in  order  to  expedite  this  question,  and  Mr.  Wegenast  is  prepared 
to  cancel  his  engagement  to  appear  before  the  Tax  Commission  of  the  Province  of 
British  Columbia  on  a  question  of  extra-corporal  ion  legislation.  As  Mr.  Wegenast 
has  told  you,  I  happen  to  be  a  member  of  the  Royal  Commission  of  Technical 
Education,  and  after  a  somewhal  lengthy  recess  my  colleagues  left  to  prosecute  their 
inquiries  in  the  New  England  States  in  the  early  part  of  this  week,  and  that  field 
promises  to  be  one  of  the  most  fruitful  fields  for  our  investigation,  and  T  felt  very 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  163 

strongly  that  I  should  he  there  with  them.  I  feel,  however,  that  this  question  of 
compensation  is  of  such  far  reaching  importance  to  the  manufacturers  of  this 
Province  that  my  duty  requires  me  to  be  here  and  to  assist  so  far  as  we  can,  sir, 
through  the  work  of  our  committee,  and  the  presentation  of  views,  and  suggestions 
to  you  that  will  enable  you  to  report  to  the  legislature  what  will  he,  I  hope,  one  of 
the  best  acts  ever  put  upon  the  books  of  any  State  on  any  country.  It  is  in  that 
spirit,  sir,  that  we  are  approaching  this  investigation,  and  the  manufacturers  will 
be  very  sorry  indeed  to  see  their  efforts  thus  far  negatived  by  lack  of  time  of 
perhaps  at  the  shortest  a  few  weeks,  or  perhaps  at  the  most  a  couple  of  months. 

Mr.  Gourlay  :  I  do  not  know  that  I  have  very  much  more  to  say  than  what 
you  have  already  heard,  other  than  to  emphasize  the  fact  that  the  manufacturers  as 
a  class,  independent  of  their  officers,  have  not  as  yet  had  much  opportunity  of 
getting  together  and  discussing  this  matter  from  its  various  aspects.  Rightly  or 
wrongly  we  had  hoped,  some  of  us,  that  we  would  have  had  some  months'  notice  in 
advance  of  the  time  of  the  sitting  of  the  Commission,  and  whilst  it  may  in  some 
measure  appear  as  if  [  were  blaming  our  officials,  yet  as  you  have  heard  it  was  only 
two  weeks  ago  that  the  committee  was  appointed  with  power  to  profit  by  the 
investigations  that  have  been  made  during  these  months,  and  which,  I  can  assure 
you,  have  occupied  a  great  deal  of  time  and  thought  to  give  the  whole  question 
careful  consideration,  not  merely  in  the  interests  of  the  manufacturers — because 
after  all  we  are  citizens  as  well  as  manufacturers — and  we  feel  the  legislation 
which  is  contemplated  at  the  present  time  should  be  on  such  a  provincial  or  national 
plane,  if  I  may  so  put  it,  that  it  will  give  the  maximum  compensation  at  the  min- 
imum of  cost  in  the  matter  of  administration.  It  should  also  take  into  consider- 
ation, I  submit,  sir,  not  merely  the  individual  factors  that  may  be  represented  by 
the  members  of  the  Associations,  but  the  whole  question  of  prevention  of  accidents, 
and  of  legislation  to  make  the  appliances  for  the  prevention  of  accidents  more 
thoroughly  and  universally  used,  not  merely  by  the  manufacturers  themselves,  but 
by  employees,  because  the  court  statistics  indicate  very  often  that  safety  devices  are 
not  used  at  the  time  of  accident.  The  question  is  a  large  one  from  the  standpoint 
of  the  prevention  of  accidents,  and  from  the  standpoint  of  the  utilization  of  medical 
aid  so  as  to  minimize  the  injury  from  the  accident,  as  well  as  to  get  the  maximum 
of  compensation  at  the  minimum  amount  of  cost  in  the  matter  of  administration, 
and  also  as  to  the  provincial  aspect  as  to  dealing  with  all  classes  of  accident.  We 
suffer  largely  from  accidents  outside  of  merely  industrial  enterprises,  and  even  if 
this  act  should  deal  with  only  industrial  enterprises  it  should  'be  large  enough  to 
take  in  prevention  along  the  lines  of  a  larger  measure  for  the  whole  Province  and 
the  whole  State.  I  submit  to  you,  sir,  as  men  who  are  vitally  interested,  and  of 
men  who  are  in  daily  contact  with  their  employees  that  there  should  be  an  under- 
lying principle  that  the  legislation  should  be  of  such  a  nature  that  the  bond  between 
the  employee  and  the  employer  shall  be  stronger  and  better  than  it  has  been  before, 
and  that  any  element  of  friction  shall  be  taken  out  of  the  way.  In  regard  to  any 
act  that  is  put  upon  the  statute  book  that  the  administration  of  any  such  act  as 
this  shall  he  along  such  lines  that  the  bonds  shall  be  closer  than  ever  before,  and  we 
think  we  are  entitled,  if  it  takes  time,  to  give  all  these  aspects  thought.  The 
suggestion  has  been  made,  no  matter  where  it  (Mine  from,  that  the  employee  and  the 
employer  should  get  together  and  discuss  this  matter  in  a  conference,  and  we  might 
come  to  an  agreement  on  some  of  the  matters,  if  not  upon  all  the  matters,  and  we 
could  then  have  your  judicial  opinion  as  to  what  is  right  and  proper;  and  therefore, 
I  submit  if  you  could  see  your  way  to  carry  it  over  for  even  three  months  I  am 


164  MINUTES  OF  EVIDENCE:  No.  65 

satisfied  we  will  come  before  you  with  something,  having  given  the  matter  thought, 
that  will  be  in  the  general  interests  of  the  community. 

T!he  Commissioner:  Just  one  word,  Mr.  Gourlay,  I  would  like  to  say.  This 
question  of  prevention  of  accidents  is,  no  doubt,  a  very  important  matter.  One  of 
the  objections  that  Mr.  Asquith  urged  to  the  legislation  by  the  Government  some 
years  ago  on  the  Compensation  Statute  was  that  it  did  not  deal  with  prevention. 
It  was  pointed  out  by  Mr.  Chamberlain  in  answer  that  they  were  not  ne- 
cessarily connected,  and  that  the  other  matter  could  be  dealt  with  separately.  Now, 
I  have  no  mandate  to  make  any  inquiry  upon  the  subject  of  prevention  of  accidents, 
hut  I  would  like  to  make  this  observation  in  consequonce  of  what  has  often  appeared 
hefore  me  in  accident  cases,  and  that  is  that  safety  devices  are  provided  by  the 
employer  and  the  workman  does  not  use  them.  The  foreman  knows  that  he  does 
not  use  them.  Now,  if  the  employer  would  let  his  foreman  understand  that  if  he 
does  not  report  and  dismiss  a  man  who  does  not  use  his  safety  device,  I  think  you 
would  not  have  many  of  these  cases  of  workmen  being  injured  owing  to  the  safety 
device  not  being  used.  What  they  do  is,  they  practically  wink  at  the  disregard  of 
the  safety  device  which  the  employer  puts  there.  That  is  a  feature  that  has  struck 
me  in  several  trials  which  have  taken  place. 

j  Mr.  Firstbrook:  Your  Lordship,  there  is  only  one  phase  I  would  touch  on 
in  addition  to  what  has  been  said,  and  that  is  there  is  no  antagonism  between  the 
employers  and  any  other  class  in  this  matter.  We  are  seeking  to  get  at  a  solution 
that  will  be  in  the  interests  of  all.  Of  course  at  times  I  compare  notes  with  my 
fellow  manufacturers  on  the  matter  of  treatment  of  employees  in  the  case  of  sick- 
ness and  accident,  and  I  have  failed  yet  to  meet  an  employer  who  has  not  compen- 
sated his  men  in  the  case  of  an  accident  and  sickness,  and  nearly  all  in  addition  to 
the  protection  that  they  pay  for  from  the  companies.  I  have  in  mind  now  a  firm 
that  were  unfortunate  enough  to  have  a  fatal  accident  in  their  factory  some  years 
ago.  The  employee  who  was  killed  left  a  widow  and  two  boys,  and  that  firm  took 
<'are  of  the  widow  and  took  care  of  the  children  during  a  number  of  years,  until 
they  were  able  to  learn  a  trade  and  do  for  themselves,  and  until  the  widow  married 
again.  The  weekly  compensation  that  the  husband  was  receiving  was  paid  to  the 
widow  during  these  years.  In  fact  in  every  case  of  an  accident  to  an  employee  of 
that  company  a  portion  at  least  of  the  wages  is  paid  without  reference  at  all  to  the 
heads  of  the  firm.  It  is  paid  by  the  time  keeper.  In  many  cases  the  full  wages 
have  been  paid  both  in  the  case  of  accident  and  sickness;  so  that  with  the  employers 
that  I  have  spoken  to,  I  have  failed  yet  to  meet  one  who  has  not  been  sympathetic 
and  who  has  not  helped  in  that  direction,  and  for  this  reason  I  submit  we  are  work- 
ing in  the  interests  of  all  concerned,  both  the  employers  and  the  employees.  There 
is  another  matter  that  occurs  to  me  in  this  connection,  and  that  is,  that  any  legisla- 
tion that  is  put  through  in  Ontario  should  be,  perhaps,  as  nearly  as  possible,  in  con- 
formity with  what  may  be  in  other  provinces,  for  this  reason,  that  ^ve  have  to 
compete.  Our  manufacturers  have  to  compete  with  the  manufacturers  in  other 
provinces,  and  if  there  is  an  extra  tax  on  one  beyond  what  may  be  in  other  pro- 
vinces it  would  perhaps  be  a  hardship,  not  only  to  the  manufacturers  ^and  employers 
of  labour,  but  io  the  labour  men  themselves.  I  think  these  are  the  only  points  that  I 
might  mention. 

Mr.  Merrtck  :  Your  Lordship,  I  represent  a  section  of  the  employing  inter- 
ests. To  a  large  extent  the  interests  of  the  employers  are  not  identical  with  those 
of  the  manufacturers,  for  this  reason,  that  the  employers  are  in  a  very  large  number 
of  cases,  men  of  very  small  means.  I  might  say  that  the  majority  of  them  have 
arrived  at  the  position  of  employers  on  emerging  from  the  ranks  of  the  workmen. 


1912  WOEKMEN?S  COMPENSATION  COMMISSION.  165 

so  that  in  the  cases  that  were  cited  here  at  the  last  session,  if  a  penalty  is  placed 
on  the  employer,  without  great  care  being  exercised,  not  only  would  the  working 
men  not  receive  compensation,  but  the  employer  would  automatically  be  ex- 
tinguished in  business.  That  is  a  phase  that  requires  a  very  great  deal  of  con- 
sideration in  connection  with  the  employing  interests.  There  is  a  disposition  on 
the  part  of  the  employers  to  give  this  matter  their  careful  attention  and  very 
general  attention  and  with  the  view  point  of  giving  as  wide  compensation  as  possible 
to  the  injured  workman.  The  employers,  as  I  say,  are  drafted  largely  from  the 
ordinary  workmen,  who  have  graduated  from  the  working  ranks  by  reason  of  skill 
and  efficiency  or  the  saving  of  the  necessary  capital  to  start  in  a  small  way  in 
Business.  We  have  felt  that  not  only,  is  the  present  Ontario  Act  an  unjust  one, 
but  that  the  act  that  is  in  force  in  Great  Britain  is  also  an  unjust  one,  and  one 
instance  was  brought  forward  by  the  young  baker  who  questioned  Mr.  Macdonell 
at  the  last  session  with  regard  to  how  insurance  rates  automatically  removed  those 
who  were  maimed  or  physically  unfit  from  the  ranks  of  industry.  That  is  a  case  we 
want  to  guard  against  in  the  Ontario  act,  and  as  far  as  I  can  see  the  most  reason- 
able suggestion  is  the  one  along  insurance  lines  where  automatically  if  a  man  is 
injured  he  would  be  compensated  for  the  damage  he  has  suffered  by  reason  of  the 
fact  of  having  come  in  contact  with  the  unfortunate  part  of  industrial  life.  The 
man  who  is  wilfully  negligent  or  through  some  other  reason  under  our  present  Act 
is  deprived  of  compensation  would,  we  believe,  be  permitted  to  receive  this  compen- 
sation on  account  of  the  fact  that  the  premiums  which  now  go  to  resist  claims  will 
go  to  pay  compensation.  It  is  along  that  line  that  we  require  a  fair  amount  of  time 
io  consider  the  best  method  to  submit  to  your  Lordship  in  connection  with  the  em- 
ploying interests.  I  had  a  meeting  called  to-day  to  go  into  the  questions  raised  at 
the  last  meeting,  but  on  account  of  the  unexpected  date  of  the  sitting  of  this  Com- 
mision  the  meeting  was  cancelled.  We  will  have  that  meeting  adjourned  until 
next  week  and  go  on  w-orking  with  the  idea  of  bringing  in  as  soon  as  possible  a 
report  from  the  employing  end.  The  employers  include  also  all  the  sections  of  the 
building  trades,  which  are  represented  here  to-day  by  their  President  and  Secretary, 
and  it  will  be  our  effort  to  ally  ourselves  with  the  building  trades  and  also  with  the 
Painters'  Association,  in  order  to  have  with  their  assistance  a  general  report  from 
all  the  employing  industries  of  the  city,  so  that  at  one  glance  you  will  be  able  to 
ascertain  exactly  what  our  view  point  is.  The  only  necessity  is  to  have  sufficient 
time  in  order  to  bring  it  before  these  men  who  have  not  very  much  leisure  time  in 
the  busy  building  season.  As  .you  are  aware  in  committee  matters  it  is  only  when 
a  vital  question  comes  before  the  committee  that  there  is  a  continuance  of  attend- 
ance and  attention,  and  now  that  the  present  matter  has  come  before  the  employing 
and  manufacturers'  interests  it  can  be  assured  that  every  reasonable  .despatch  will 
be  taken  so  that  our  report  will  be  presented  to  your  Lordship  if  possible  before 
the  first  meeting  of  the  legislature. 

Mr.  Wegenast:  There  is  only  one  thing  I  have  to  add.  Your  Lordship 
made  a  suggestion  the  other  day  that  data  should  be  placed  before  the  Commission 
as  to  the  schemes  of  compensation  at  present  in  operation.  It  would  be  a  work  of 
considerable  magnitude  to  gather  this  data.  It  would  be  necessary  for  me  to  send 
out  circulars. 

The  Commissioner:  Can  you  not  count  upon  the  fingers  of  your  two  hands 
the  number  of  organizations  that  have  such  schemes  ? 

Mr.  Wegenast:  No,  I  think  not  your  Lordship.  As  Mr.  Firstbrook  has 
stated  I  think  a  very  large  proportion  of  the  employers  that  our  Association  repre- 
sents — some  sixteen  or  eighteen  hundred — have  in  operation  schemes  which  depend 


166 


MINUTES  OF  EVIDENCE:  No.  65 


altogether,  as  I  stated  to  your  Lordship  the  other  day,  rather  on  custom  than  on  any 
organization. 

The  Commissioner  :  I  did  not  understand  that  Mr.  Firstbrook  spoke  of  any 
scheme.     He  spoke  of  generous  treatment  by  the  employers  of  their  workmen. 

Mr.  Wegenast  :  Take  the  case  that  your  Lordship  instanced,  of  the  Massey- 
Harris  Company.  I  doubt  whether  the  Massey-Harris  Company  can  show  a  shred 
of  writing  as  to  its  organization,  although  it  is  most  effective  and  most  satisfactory 
to  the  company  and  to  the  employees,  and  if  any  data  of  that  sort  is  to  be  gotten  it 
will  require  time. 

Mr.  Corkill  (Inspector  of  Mines)  :  I  believe  the  views  of  the  mining  com- 
panies and  the  mining  employees  throughout  the  Province  have  not  been  presented 
to  this  Commission.  While  going  around  the  Province  during  the  last  few  weeks  I 
have  been  approached  by  both  the  employees  and  the  mine  managers  with  the  idea 
that  an  opportunity  should  be  given  for  their  views  to  be  presented  to  this  Com- 
mission, and  I  was  requested  to  ask  if  a  meeting  could  be  held  in  say  a  couple  of 
weeks  to  give  them  an  opportunity  of  being  present. 
The  Commissioner:    Where? 

Mr.  Corkill:  Well,,  it  Avas  asked  by  the  employees  most  largely  if  a  meet- 
ing could  be  held  in  Cobalt,  or  Cobalt  and  Sudbury.  Those  are  centres  where 
employees  are  gathered,  and  it  would  be  much  more  convenient  for  the  employees 
if  the  Commission  could  sit  there.  I  presume  that  the  mine  owners  themselves 
could  come  to  Toronto.  As  I  understand  it  there  is  only  one  organization  of  em- 
ployees, and  that  is  at  Cobalt. 

The    Commissioner:     Would    it    not    be    easier    for    the    officers    of    those 
organizations  to  come  down  here  than  to  take  the  Commission  up  there? 
Mr.  Corkill:  I  just  gave  that  as  a  suggestion. 

The  Commissioner  :  I  suppose  there  is  no  reason  why  the  travelling  expenses 
of  these  gentlemen  should  not  be  paid.  They  could  be  paid  like  a  witness,  I 
suppose. 

Mr.  Corkill:  It  is  very  difficult  for  the  employees  to  get  off  a  sufficient 
length  of  time,  and  also  pay  their  expenses. 

The  Commissioner:  Will  there  not  be  somebody  to  represent  the  body  and 
speak  for  them  ? 

Mr.  Corkill:  That  would  be  in  Cobalt.  There  they  could  have  the 
President  or  Secretary  of  their  Union  speak  for  them,  but  in  Sudbury  and  other 
mining  camps  they  have  no  organization,  and  consequently  there  would  be  no 
member  who  could  present  the  views  of  the  miners.  In  the  Sudbury  camp  prob- 
ably sixty  or  seventy-five  per  cent,  of  the  employees  are  foreigners.  Fifty  per  cent, 
could  not  speak  English,  probably. 

Mr.  Bancroft  :  I  might  say  that  at  the  Dominion  Trade  Congress  at  Calgary 
some  few  weeks  ago,  there  was  a  resolution  passed.  There  were  163  delegates 
present  representing  57,000  paying  members,  and  indirectly  150,000  members  on 
this  continent,  or  in  the  Dominion  of  Canada  rather,  and  the  resolution  was  this, 
that  the  Ontario  Executive  Committee  immediately  get  in  touch  with  the  Com- 
mission organized  for  the  purpose  of  considering  workmen's  compensation  in 
Ontario,  and  ask  that  there  should  be  no  unnecessary  delay,  and  why  there  had  been 
delay,  if  any ;  so  you  see  it  is  impossible  for  us  to  consent,  or  even  to  think  that  any 
delay  is  necessary.  I  think  your  Lordship's  observations  were  quite  correct.  Every- 
body knew  when  the  Commission  was  appointed  that  evidence  was  needed,  and  that 
conclusions  would  be  drawn  from  the  evidence  which  was  given  largely  by  the  Com- 
mission.    Since  that  time  T  believe  organized  labor  has  undertaken  to  collect  all 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  167 

the  evidence  that  they  possibly  need,  and  to  present  it  when  you  wished  it  in  a 
proper  manner  so  that  you  should  understand  what  we  want.  I  am  not  so  sure 
but  that  the  manufacturers  have  done  the  same,  from  observations  which  we  have 
had,  and  I  believe  from  what  has  been  written  in  their  organization.  I  think  Mr. 
Wegenast  went  to  New  York  and  he  heard  the  report  of  the  representative  who  had 
travelled  all  over  Europe,  and  I  understand  that  was  for  the  purpose  of  gaining 
information  on  the  subject.  The  manufacturers  have  had  their  convention,  and 
they  had  representatives  from  all  over  the  Province  of  Ontario.  They  had  a  lecturer 
there  who  was  to  give  them  all  the  statistics  possible  from  his  experience  in  going 
all  over  Europe.  And  now  when  the*  Commission  meets  a  request  is  made  that 
delay  is  absolutely  necessary  for  them  to  state  what  their  members  want.  They  say 
for  eleven  years  or  so  this  matter  has  been  held  up,  and  that  we  have  only  had  the 
old  Employers'  Liability  Act,  and  so  on.  That  is  true ;  and  in  that  eleven  years  who 
knows  how  many  have  suffered,  and  have  been  injured  and  maimed  and  crippled  in 
the  industry  who  have  gone  without  any  compensation,  and  the  mothers  and  chil- 
dren that  have  been  thrown  upon  the  world  without  any  resources.  From  that 
standpoint  we  don't  believe  in  any  delay.  We  don't  believe  there  is  any  reason 
whatever  for  delay  at  the  present  time,  and  we  do  hope  you  will  report  to  the  next 
session  of  the  legislative  House  in  Ontario.  As  far  as  the  workers  are  concerned 
we  are  here,  I  think,  to  speak  for  the  workers  from  the  Toronto  Central  Body,  and 
we  hardly  hesitate  to  say  there  that  the  views  which  we  will  express  will  be  coincided 
in  by  organized  labour  generally.  In  the  Dominion  Trade  Congress  there  is  probably 
every  kind  of  workman  represented,  including  miners,  and  from  the  discussions 
from  year  to  year  of  one  kind  and  another  we  know,  I  think,  what  labour  wants 
in  the  way  of  compensation.  It  has  been  said  this  morning  that  the  delay  was 
necessary  in  order  to  consult  all  the  members  of  the  Manufacturers'  Association. 
However,  it  seems  to  me  from  the  unanimity  of  opinion  this  morning  for  delay 
there  must  have  been  some  consultation,  and  some  reason  for  the  delay.  If  the 
Workmen's  Compensation  Act  is  to  he  modelled  upon  the  British  Act,  as  I  believe 
organized  labour  wants  it,  I  do  not  see  any  reason  for  any  unnecessary  delay  in  the 
matter.  It  is  plain.  With  regard  to  extinguishing  employers  by  workmen's  com- 
pensation such  as  is  in  existence  in  Great  Britain,  I  don't  believe  that  any  evidence 
has  ever  been  produced  in  Great  Britain  in  the  last  five  years,  or  in  Germany  since 
compensation  and  social  insurance  was  in  existence,  that  gives  anybody  any  reason 
to  make  any  such  statement  anywhere  at  any  time.  An  employer  who  does  not 
insure  himself  when  the  law  calls  for  it  against  risks  to  his  employees,  is  like  the 
employer  who  refuses  to  take  out  fire  insurance,  and  then  blames  his  loss  on  the 
carelessness  of  somebody  else.  After  all  it  is  a  tax  upon  industry.  In  the  last 
analysis,  there  is  no  doubt  about  it,  but  what  the  consumer  will  pay  for  it.  The 
employers  of  the  Old  Country  are  not  individually  liable  only  so  far  as  they  insure 
against  all  risks  and  hazards  of  industry  in  an  insurance  company.  They  talk  about 
insolvency,  but  it  is  strange  to  say  that  it  is  the  employers  who  are  the  ones  that 
wish  to  protect  the  workmen  against  the  insolvent  employer.  The  workmen  of 
Great  Britain  have  not  found  it  difficult  to  deal  with  that  question,  and  the  insol- 
vency part  of  the  workmen's  compensation  is  covered  hy  the  British  Act  and  is 
entirely  up  to  date  to  the  satisfaction  of  the  workingmen. 

It  has  been  said  that  men  have  gone  all  over  Europe  and  investigated  these 
conditions  for  themselves,  and  they  have  observed  apart  from  reading  reports.  I 
might  say  that  from  time  to  time  we  have  members  of  organized  labour  in  Europe. 
Men  who  are  leading  men  in  organized  labour  both  in  Great  Britain  and  on  the  con- 
tinent, come  to  this  country  and  we  understand  and  know,  exactlv  what  they  are 


16«  MINUTES  OF  EVIDENCE:  No.  65 

doing.  It  is  not  exactly  from  reports,  it  is  from  actual  contact  with  industry  in 
every  part  of  the  world,  and  we  have  men  in  Canada  who  go  over  there.  Now,  I 
hope  that  your  Lordship  will  direct  a  certain  time  when  both  parties  will  be  ready. 
A  complaint  has  been  made — I  don't  know  whether  it  is  a  complaint,  but  a  sug- 
gestion— that  labour  should  consult  with  the  manufacturers.  I  wish  that  the  manu- 
facturers on  all  things  were  as  ready  to  consult  with  organized  labour  as  they  are  on 
workmen's  compensation.  We  do  not  feel  altogether  that  our  case  has  got  to  be 
made  out  before  the  Manufacturers'  Association.  I  believe  that  the  case  of  work- 
men's compensation  has  got  to  be  made  out  before  this  Commission  and  to  the 
Ontario  Government;  and  from  that  standpoint  we  feel  that  we  have  truth  and 
justice  on  our  side  as  far  as  workmen's  compensation  is  concerned,  and  are  ready 
to  meet  before  this  Commission  at  any  time  any  objection  to  our  position,  and  to 
meet  the  objections  taken  by  other  parties.  The  individual  case  cited  by  a  manu- 
facturer where  an  employer  took  care  of  a  widow  and  children  until  they  became  of 
certain  years,  and  so  on— I  only  wish  that  was  true  in  a  larger  sense.  If  there  is 
that  feeling  amongst  the  manufacturers  that  that  is  a  good  thing  they  should  have 
no  objection  whatever  to  the  British  Workmen's  Compensation  Act— none  what- 
ever— But  I  am  afraid  that  is  an  exception  rather  than  the  general  rule.  In  fact 
I  know  from  personal  experience  it  is  so.  I  do  not  see  that  we  have  any  reason  to 
make  argument  this  morning  on  workmen's  compensation,  but  only  to  raise  objection 
to  any  delay.  When  you  desire  at  any  time  information  as  to  the  position  of  labour 
on  this  question  we  will  be  ready  and  willing  to  give  it  to  you.  I  believe,  however, 
that  it  may  be  possible  for  our  information  to  be  drawn  up  in  such  a  manner  that 
it  could  be  given  almost  without  explanation  and  so  that  you  could  understand 
thoroughly  what  labour  desires.  I  believe  we  could  do  that,  and  I  believe  it  would 
not  take  us  very  long  either.  So  I  say  that  we  object  to  any  delay  whatever.  We 
are  prepared  to  give  evidence  at  any  time.  If  the  scope  is  for  the  Province  of 
Ontario,  why,  we  will  endeavour  to  do  that.  In  fact  I  believe  we  can  get  the 
Dominion  Trade  Congress  represented  here  to  give  evidence  before  you.  Why,  the 
"Royal  Commission  on  Technical  Education  would  not  go  to  a  city  and  ask  for  evi- 
dence and  because  somebody  would  say  tbey  were  not  prepared  put  if  off  for  three 
months.  The  Eoyal  Commission  would  not  dream  of  that.  The  Eoyal  Com- 
mission tell  people  to  be  prepared  to  give  their  evidence.  This  Commission  has 
been  appointed,  I  believe,  for  one  or  two  years.  We  were  the  ones  that  asked  for  it. 
I  do  not  see  any  reason  for  delay  in  the  matter  whatever.  The  delay,  of  course,  is 
more  beneficial  to  the  manufacturer  than  to  the  employee,  because  delay  for  years 
has  meant  cripples  in  industry  who  have  never  got  anything  because  of  the  legis- 
lation. I  am  not  so  sure  that  the  sentiments  that  are  expressed  before  Commissions 
are  always  the  sentiments  that  guide  employing  interests  of  any  country  when 
dealing  with  practical  cases  of  compensation.  So,  your  Lordship,  I  suggest  that 
you  name  a  time  yourself  and  tell  the  parties  to  be  ready,  and  that  we  give  the 
evidence  when  you  ask  for  it. 

The  Commissioner:  •  When  will  those  you  represent  be  ready,  Mr.  Bancroft. 

Mr.  Bancroft:     Well,  I  don't  see  that  we  need  more  than  a  week  or  two.     A 
week  or  l  wo  notice  to  us  will  be  enough. 

The  Commissioner:     I  suppose  you  would  prefer  an  evening  meeting? 

Ah;.  Bancroft:     It  would  bo  better. 

'I'm:  Commissioner:     If  you  will  say  about  the  time  we  will  lcl  you  know. 

I  would  like  to  ask  if  anyone  is  here  representing  the  agricultural  interests. 
Notice  was  sent  to  the  gentlemen  who  were  supposed  to  represent  those  interests 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  169 


because  that  is  within  the  scope  of  the  British  Act.     I  think  it  would  be  well  to 
notify  them. 

Mr.  Bancroft:  I  would  like  to  draw  your  attention  to  one  point  which  we 
would  like  borne  in  mind.  In  the  British  Columbia  legislation  on  workmen's  com- 
pensation there  has  been  an  interpretation  made,  I  believe,  by  a  judge  of  the  court 
in  that  province,  whereby  if  a  man  is  killed  in  British  Columbia  and  his  wife  and 
children  happen  to  be  living  in  Saskatchewan  his  dependants  would  get  no  com- 
pensation. I  hope,  your  Lordship,  for  the  benefit  of  all  concerned  that  nothing  of 
that  nature  will  be  allowed  to  creep*  into  any  Workmen's  Compensation  Act  in 
Ontario. 

The  Commissioner:     There  is  something  like  that  in  the  Manitoba  Act? 

Mr.  Bancroft  :  Yes,  and  it  is  a  mistake.  It  is  so  much  of  a  mistake  that  the 
Dominion  Trade  Congress  intend  to  fight  that  case  to  the  Privy  Council,  where  it 
now  is. 

The  Commissioner:  Unless  there  is  something  in  the  Act  specially  provid- 
ing otherwise  it  was  so  held. 

Mr.  Bancroft:     It  was  never  before  the  Privy  Council,  but  it  is  going  there. 

The  Commissioner:  Mr.  Justice  Darling  decided  that  the  Fatal  Accident 
Act  was  not  applicable  to  a  foreigner,  and  that  was  over-ruled. 

Mr.  'Geo.  Gander:  Speaking  for  the  building  trade,  your  Lordship,  I  gen- 
erally coincide  with  Mr.  Merrick's  words,  that  we  would  like  a  little  time,  and  I 
believe  we  will  come  before  you  with  a  more  decided  and  general  view  that  will  be 
perfectly  agreeable  on  certain  points,  and  I  think  myself  that  will  almost  occur  on 
both  sides  of  the  house.  The  reason  I  express  the  view  that  way  is  at  the  last 
meeting  there  was  quite  a  difference  of  opinion  as  far  as  the  labour  people  themselves 

Mr.  Bancroft  :  The  gentleman,  as  far  as  we  know,  who  gave  his  views  was 
an  individual.    The  labour  people  were  being  represented. 

Mr.  'Gander  :  I  only  mention  this  to  show  there  must  be  a  large  diversity  of 
opinion,  for  you  see  I  have  run  against  a  snag  already.  We\  may  have  different 
opinions  in  the  building  trades,  hut  we  feel  by  meeting,  in  a  very  short  time  we 
could  come  before  you  with  an  opinion  that  we  would  not  differ  on.  We  would  not 
wish  to  state  that  sucli  a  thing  might  occur  to  the  extent  of  ten  per  cent.,  and 
another  individual  turn  around  and  say  it  might  occur  to  the  extent  of  thirty  per 
cent.  I  believe  we  could  get  these  opinions  pretty  well  formulated  and  in  a  better 
state  in  a  little  time. 

Mr.  Gibbons:  As  this  meeting  seems  to  be  called  for  the  purpose  of  asking 
for  delay  and  the  employing  classes  seem  to  be  united  in  wanting  delay, 
yet  we  cannot  see  what  can  be  gained  by  delay.  As  has  been  pointed  out 
by  my  colleague,  the  manufacturers  had  a  convention,  and  they  have  been  gathering 
statistics  from  the  United  States,  and  they  have  had  all  the  acts  ,of  the  various 
provinces  before  them.  Now,  probably  we  come  here  in  a  different  way  to  what 
they  do.  We  come  here  with  the  purpose  of  giving  evidence  to  the  Commission 
formulating  the  act.  We  do  not  suppose  that  we  are  coming  here  today  down  an 
act  clause  by  clause  that  will  be  submitted  to  the  Government.  I  -do  not  think 
the  Commission  expects  that.  They  want  us  to  give  what  information  we  have 
and  our  opinions,  and  I  do  not  see  anything  to  prevent  them  from  doing  that.  If 
we  were  to  ask  for  time  to  go  and  consult  every  individual  we  would  not  be  able  to 
give  you  evidence  for  the  next  two  years.  Therefore,  I  do  not  see  anything  to  be 
gained  by  delay.  The  last  gentleman  mentioned,  an  employee  or  a  worker, 
who  came  here  last  time,  and  I  would  say  that  that  gentleman  came  here  on  his 


170  MINUTES  OF  EVIDENCE:  No.  65 

own  initiative,  and  no  matter  what  scheme  was  put  up  he  was  here  to  oppose  it. 
We  know  where  the  opposition  came  from,  and  therefore  that  is  no  excuse  for  delay. 
I  do  not  think  the  Commissioner  expects  the  employers  or  the  employees  to  lay 
down  a  hard  and  fast  Act.  I  think  what  the  Commission  wants  is  evidence,  and 
they  will  formulate,  or  the  Government  will  formulate,  an  act  on  that  evidence; 
and  we  are  prepared  to  go  ahead  any  time. 

Mr.  J.  W.  Doggett:  I  would  certainly  like,  your  Lordship,  to  pass  my 
opinion  against  this  delay.  I  might  state  that  since  the  last  meeting  of  the  Com- 
mission there  have  been  accidents  in  the  building  trades  of  the  city,  even  since 
last  Monday.  I  am  just  saying  this  to  show  that  delay  is  pretty  costly  to  the 
labour  interests  in  those  cases,  and  I  think  myself  that  all  possible  aid  and  every 
effort  should  be  made  to  bring  a  Workmen's  Compensation  Act  into  the  Province 
of  Ontario,  and  put  upon  the  statute  books  of  the  Province  of  Ontario,  whereby 
the  workers  will  be  getting  compensated  instead  of  looking  for  charity,  such  as  a 
case  that  came  to  my  notice  this  week,  where  a  man  was  laid  up  for  seventeen  weeks 
in  St.  Michael's  hospital  who  met  with  an  accident,  and  his  wife  and  children  were 
going  to  the  House  of  Industry  asking  for  bread.  That  man  met  with  an 
accident  in  the  course  of  his  occupation,  and  that  is  one  reason  for  our  protest 
against  any  delay  in  giving  evidence. 

The  Commissioner:  You  might  give  the  Secretary  the  name  and  address 
of  that  man. 

Mr.  Bancroft  :  We  would  hope  that  you  would  direct  a  time  when  the  manu- 
facturers' representatives  shall  be  ready  to  give  evidence,  as  well  as  ourselves, 
because  if  you  remember  we  intimated  we  would  like  both  to  be  here  at  the  same 
lime. 

The  Commissioner:  That  possibly  may  be  impracticable.  We  cannot  force 
them  to  come  together  unless  they  choose. 

I  do  not  see  any  reason  to  change  the  view  I  expressed  during  the  course  of  the 
discussion.  I  must  have  this  inquiry  completed  so  that  I  shall  be  in  a  position  to 
report  to  the  House  at  its  next  session.  I  recognize  the  reasonableness  of  the 
request  that  there  should  be  no  undue  thaste,  and  that  an  opportunity  should  be 
afforded  to  everybody  interested  to  present  his  views  before  the  Commission  con- 
cludes its  labours,  but  it  would  be  out  of  the  question,  I  think,  as  I  have  already 
stfated,  to  allow  any  delay  which  would  prevent  the  Commission  reporting  during 
the  next  session.  The  Commission  was  issued  sixteen  months  ago,  within  a  few 
days,  and  public  notice  was  given  of  it,  and  the  matter  was  discussed  before  the 
Commission  was  issued,  so  that  the  manufacturers  were  well  aware  that  this  subject 
was  one  that  would  engage  the  attention  of  the  Commission,  possibly  at  an  earlier 
date,  it  might  have  been  expected,  than  the  date  when  the  Commission  was  able  to 
meet,  and  during  all  this  time  I  cannot  imagine,  that  the  manufacturers  have  been 
lying  on  their  oars  and  not  gaining  information  and  formulating  views  with  regard 
to  the  question. 

I  think  it  i<  probable  that  I  shall  go  to  some  of  the  other  cities.  I  shall 
make  some  further  inquiries  before  deciding  that,  however.  It  would  perhaps 
look  invidious  to  take  only  views  here  in  Toronto.  I  may  possibly  go  to  other 
large  centres  of  trade  and  business  throughout  the  Province,  and  I  may  go,  as  the 
Inspector  has  asked,  to  the  'Cobalt  and  Sudbury  districts,  if  that  is  thought  to  be 
the  most  convenient  way  of  getting  the  views  of  the  mining  industries.  Then  in  the 
meantime  I  will  hold  meetings  and  I  will  hear  the  Trades  and  Labour  Council, 
or  any  individuals  who  desire  to  be  heard.     Possibly  there  may  be  some  evidence 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  171 

taken.  In  the  meantime  the  manufacturers  and  building  trades  can  be  getting 
ready  with  whatever  they  are  proposing  to  submit;  but  they  must  understand  that 
however  much  I  may  desire  to  have  the  benefit  of  their  inquiry  and  opinion  upon 
the  question,  that  anything  they  have  to  offer  must  he  in  time  to  enable  me  to 
make  the  report  at  the  next  session. 

Then,  Mr.  Bancroft,  if  you  and  Mr.  Gibbons  and  Mr.  Doggett  will  find  out 
what  time  will  he  most  convenient  for  those  you  represent  to  be  here  I  will  arrange 
the  date,  and  in  addition  to  any  written  statement  I  would  like  to  make  some 
inquiries  of  those  who  may  attend,  and  of  course  it  will  be  open  to  anybody  else 
to  be  present.  Mr.  Wegenast  possibly  may  be  here  as  representing  the  manu- 
facturers if  he  chooses  to  hear  and  take  part  in  the  discussion. 

Mr.  Doggett  :  I  have  now  the  name  of  the  man  I  referred  to.  His  name  is 
W.  Barnett,  living  in  the  rear  of  61  Oak  Street,  Toronto.  He  met  with  the 
accident  while  working  for  the  National  Iron  Works,  Toronto. 

The  Commissioner  :  Would  it  not  be  a  good  idea  to  have  one  of  the  factory 
inspectors  here  when  we  are  discussing  these  questions? 

Mr.  Bancroft:     I  think  it  would. 

The  Commissioner  :     Mr.  Kennin  can  notify  them. 


THIRD  SITTING 


COBALT  MTNERS. 

Held  at  the  Town  of  Cobalt,  Ontario. 

Thursday,   lith  December,  1911,  2  p.m. 

Present:     Sir  William  R.  Meredith,  Commissioner. 
Mr.  W.  B.  Wilkinson,  Law  Clerk. 

The  Commissioner  :  I  have  been  commissioned  by  His  Honour  the  Lieuten- 
ant-Governor of  Ontario  to  make  inquiry  into  the  subject  of  workmen's  compensa- 
tion with  a  view  to  recommending  to  the  legislature  a  measure  which  will  be  satis- 
factory to  conditions  in  this  country.  My  duty  has  been  to  collect  information  as 
to  the  laws  that  obtain  in  other  countries;  and  I  am  taking  advantage  of  meeting 
the  people  who  are  interested,  both  employers  and  employees,  in  order  to  get  their 
views,  so  that  I  may  have  before  me  when  I  come  to  make  a  recommendation  to 
His  Honour  all  the  views  bearing  upon  this  most  important  subject. 

Mr.  Corkill  was  at  one  of  the  earlier  meetings  which  took  place  in  Toronto, 
and  he  suggested  that  in  view  of  the  very  large  number  of  persons  who  were  in- 
terested, both  as  employers  and  employees,  in  the  mining  industry,  one  of  the  most 
important  industries  of  the  Province,  it  would  be  desirable  to  hold  a  meeting  here, 
and  I  am,  therefore,  here  to  hear  the  views  of  those  who  desire  to  express  their 
views  to  me.  I  am  anxious  to  hear  not  only  from  the  organizations,  both  of  the 
mine  foremen  and  the  workmen,  but  also  from  any  individual  who  thinks  he  has 


172  MINUTES  OF  EVIDENCE:  No.  65 

* 

anything  to  say  that  will  be  useful  for  the  purpose  of  assisting  in  the  work  which 
I  have  been  called  upon  to  do.  I  shall  be  glad  now  to  hear  anybody  who  desires  to 
present  any  views. 

Me.  Ware  :  I  represent  the  four  Miners'  Unions,  the  Western  Federation  of 
Miners'  Union  at  Porcupine,  Elk  Lake,  Cobalt  and  Silver  Centre.  As  the  matter 
has  only  just  been  brought  to  my  attention,  and  I  have  only  been  instructed  within 
the  last  two  hours,  I  will  give  you  the  information,  or  the  opinions  which  have 
been  expressed,  with  regard  to  the  subject  from  these  bodies.  In  the  first  place  the 
Unions  and  the  members  which  I  represent  consider  that  the  Workmen's  Compen- 
sation Act  in  Ontario  is  very  much  too  narrow,  and  that  according  to  their  ideas 
it  should  in  its  working,  as  amended,  embrace  all  kinds  of  accidents  arising  from 
any  cause  whatsoever.  That  is  to  say  not  only  those  which  are  accidental  accidents, 
but  those  which  arise  from  defective  machinery  and  plant  and  the  defective  systems 
of  working,  but  also  from  the  negligence  of  fellow  employees,  and  from  accidental 
accidents,  if  I  may  use  the  term,  pure  accidents,  which  result  in  injury  to  any  of 
the  employees.  It  is  also  considered  advisable  in  connection  with  the  administra- 
tion of  this  Act  to  have  a  system  of  State  Insurance  in  which  the  employers  only 
should  be  asked  to  contribute  to  the  premiums,  and  supply  the  needed  funds  to  a 
large  extent,  in  conjunction  with  the  State,  for  the  compensation  of  accidents  and 
injuries  which  occur.  The  matter  has  been  gone  into  very  carefully  with  the  dif- 
ferent councils  representing  these  organizations,  and  they  have  drafted  out  an 
epitome  of  what  they  considered  advisable  in  the  amendment  of  the  law  on  the 
subject.  They  have  prepared  and  signed  a  brief  of  the  suggestions  which,  with 
your  Lordship's  permission,  I  will  hand  in  to  you. 

The  Commissioner  :    That  is  the  same  that  has  come  from  Toronto  ? 

Mr.  Ware:     Yes. 

The  Commissioner  :  Perhaps  you  had  better  read  it  so  that  the  mine  owners 
can  hear  it? 

Mr.  Ware  :  It  is  addressed  to  Sir  William  Meredith,  Commissioner  of  the 
Provincial  Government,  re  Workmen's  Compensation  Legislation. 

"  Sir  — 

"  Understanding  that  it  is  the  desire  of  the  Commission  to  make  recommenda- 
tions for  a  Workmen's  Compensation  Act  in  harmony  with  modern  industrial  con- 
ditions, we  have  the  honour  to  submit  herewith  recommendations  for  a  Workmen's 
Compensation  Act  for  the  Province  of  Ontario. 

"These  recommendations  have  been  discussed  and  unanimously  agreed  to,  by 
representatives  of  the  Dominion  Trades  and  Labour  Congress,  Toronto  Central 
Labour  Council,  the  Building  Trades  Council  of  Toronto,  and  the  Metal  Trades 
Council,  whoso  signatures  are  appended  hereto. 

"  We  also  understand  that  it  is  the  expressed  desire  of  the  Commission  to  re- 
port to  the  next  session  of  His  Majesty's  Provincial  Legislature  the  conclusions 
and  recommendations  for  legislation  of  this  Commission,  on  this  subject.  We, 
therefore,  have  lost  no  time  in  taking  the  matter  up,  to  suit  the  convenience  of  the 
Commission. 

"We  propose  1o  give  plainly,  therefore,  the  fundamental  principles  which  we 
believe  should  be  the  basis  for  construction  of  a  new  Workmen's  Compensation  Act 
in  this  Province. 

"It  is  unnecessary  to  refer  to  the  present  legislation  in  Ontario.  Its  useless- 
ness  has  been  pointed  out  for  years  by  representatives  of  labour,  its  obsoleteness  in- 
deed, preventing  almost  anyone  from  even  an  attempt  to  defend  it. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  173 

"  The  ancient  character  of  the  present  legislation  may  make  it  seem  to  many 
that  a  new  Act  in  harmony  with  modern  conditions,  with  modern  legislation  in 
countries  that  have  made  serious  attempts  to  solve  the  question,  is  in  the  nature  of 
radical  legislation,  but  that  is  merely  because  the  matter  has  been  so  long  neglected 
in  Ontario.     We  propose  that  the  new  act  shall  cover: — 

"1.  All  employments,  the  employees  of  the  Province,  Municipality,  County,  or 
other  administrative  bodies  in  the  Province  to  be  covered  the  same  as  employees  in 
industries. 

"  2.  Compensation  for  all  injuries  arising  out  of,  and  in  the  course  of  employ- 
ment. 

"  3.  Compensation  for  being  disabled,  or  other  injuries  arising  out  of,  or  as  the 
result  of  a  specified  occupation,  the  said  disablement  and  injuries  being  in  the 
nature  of  occupational  diseases. 

"  4.  Entire  cost  of  compensation  to  rest  upon  employer. 

"5.  In  the  case  of  injury  resulting  in  death,  the  defendants  as  outlined  in  the 
British  Act,  and  State  of  Washington  Act,  shall  be  the  beneficiaries,  with  the 
expenses  of  the  funeral  as  outlined  also. 

"6.  The  doctrine  of  negligence  on  the  part  of  employees  or  employer,  fellow 
servant  or  otherwise,  shall  have  no  place  in  the  new  legislation. 

"  7.  State  insurance  in  connection  with  Compensation  Act. 

"8.  The  creation  of  a  provincial  Department  of  Insurance  with  three  Com- 
missioners, for  the  purpose  of  administration  of  the  act. 

"9.  Compulsory  insurance  of  employees  in  the  State  department,  by  a  yearly 
tax  levied  upon  the  industry  or  occupation,  covering  the  risk  of  the  particular 
industry  or  occupation. 

"  10.  The  tax  shall  be  upon  the  yearly  wage  roll. 

"11.  No  employer  shall  attempt  to  pay  the  tax  by  deduction  of  wages  of 
employees,  by  agreement  or  otherwise,  such  action  to  be  regarded  as  a  gross  misde- 
meanour, as  provided  for  in  the  State  of  Washington  legislation. 

"12.  The  schedules  of  payment  under  the  act  to  be  based  upon  the  payments 
under  the  British  Act,  with  the  proportional  increases  due  to  the  difference  in  the 
wages  in  Ontario,  reflecting  the  difference  in  the  cost  of  living. 

"  13.  The  Provincial  Government  shall  provide  revenue  for  the  creation  of 
the  department  of  insurance. 

The  following  will  give  you  some  idea  of  the  weight  of  opinion  in  favour  of  the 
burden  being  borne  by  the  employer  or  industry  alone: 

Great  Britain.  The  employers  alone  bear  the  burden,  and  they  insure  volun- 
tarily in  state,  mutual,  or  private  stock  companies. 

Norway.    Employers  bear  the  burden  and  State  insurance  is  compulsory. 

Sweden.     Employers  bear  the  burden  and  insure  as  in  Great  Britain. 

Holland.  Employers  bear  the  burden  by  compulsory  insurance  in  State, 
mutual  or  private  organizations. 

Denmark.  Employers  bear  the  burden  and  insure  as  in  Great  Britain,  but 
insurance  is  compulsory. 

Belgium.  Employers  bear  the  burden  by  voluntary  insurance  as  in  Great 
Britain. 

France.  Employers  bear  the  burden  by  voluntary  insurance  as  in  Great 
Britain. 

Italy.  Employers  bear  the  cost  by  compulsory  insurance,  but  insure  in  State, 
mutual  or  otherwise,  as  in  Great  Britain. 


174  MINUTES  OF  EVIDENCE:  No.  65 

Germany.  Employers  bear  the  cost  of  workmen's  compensation.  Insurance 
is  compulsory  in  State,  mutual  trade  associations  and  State  Executive  Boards. 

Wage  earners  covered  by  such  compensation: 

Great  Britain    13,000,000 

Norway    \ 400,000 

Sweden    1,000,000 

Holland 1,000,000 

Belgium    2,100,000 

France   , 9,500,000 

Italy    10,000,000 

Germany    15,000,000 

Total    52,000,000 

Fifty-two  million  workers  covered  by  compensation  legislation  in  which  the 
whole  burden  is  on  the  employer  or  industry. 

There  are  those  who  confuse  the  contributory  schemes  of  sick  insurance,  inval- 
idity and  old  age,  with  compensation  legislation,  but  this  Commission  is  not  deal- 
ing with  social  insurance,  only  so  far  as  it  affects  compensation  for  accidents,  fatal 
or  otherwise,  arising  out  of  or  in  the  course  of  employment,  and  we  therefore  deal 
with  it  as  such. 

The  doctrine  of  contributory  negligence  was  the  always  fruitful  source  of 
litigation,  and  as  the  position,  "  That  the  worker  would  injure  himself  to  obtain 
compensation  "  has  become  untenable,  as  well  as  the  fact  that  if  a  workman  takes 
risks,  it  is  generally  because  in  the  nature  of  his  employment  conditions  make  him 
do  so.  This  doctrine  has  almost  wholly  passed  away.  It  exists  mostly  in  old  legis- 
lation on  the  matter. 

The  tendency  of  thought  in  Europe  as  well  as  North  America  is  towards  com- 
pulsory State  insurance. 

The  British  Act,  an  admirable  one,  is  found  to  be  in  need  of  improvement  in 
this  direction,  as  the  British  Trades  Congress,  the  mouthpiece  of  organized  labour, 
is  seeking  to  have  established  compulsory  State  insurance  in  connection  with  the 
act. 

The  Manitoba  Act,  modelled  upon  the  British  legislation,  is  found  to  be  want- 
ing improvement  in  this  direction  also,  as  the  CentraJl  Labour  Council  in  Winnipeg 
has  expressed  itself  a  short  time  ago  as  intending  to  seek  compulsory  State  insur- 
ance in  connection  with  the  legislation. 

The  splendid  legislation  of  the  State  of  Washington  recently  placed  in  opera- 
tion with  a  State  Department  of  Insurance,  and  a  declaration  of  police  power,  is 
worthy  of  your  most  serious  attention,  from  which  we  quote  the  following: 

"  The  common  law  system  of  governing  the  remedy  of  workmen  against 
employers  for  injuries  received  in  hazardous  work  is  inconsistent  with  modern 
industrial  conditions.     In  practice  it  proves  to  be  economically  unwise  and  unfair. 

"Its  administration  has  produced  the  result  that  little  of  the  cost  to  the 
employer  has  reached  the  workman  and  thai  little  only  at  large  expense  to  the 
public. 

"The  remedy  <>f  the  workman  has  been  uncertain,  slow  and  inadequate. 

"Injuries  in  such  works,  formerly  occasional,  have  become  frequenl  and  inevi- 
table. 


1912  WORKMEN'S  COMPENSATION  COMMISSION".  175 

"  The  welfare  of  the  State  depends  upon  the  industries  and  even  more  upon 
the  welfare  of  its  wage  workers. 

"The  State  of  Washington,  therefore,  exercising  herein  its  police  and  sov- 
ereign power,  declares  that  all  phases  of  the  premises  are  withdrawn  from  private 
controversy,  and  sure  and  certain  relief  for  workmen,  injured  in  extra  hazardous 
work  and  their  families  and  dependants,  is  hereby  provided,  regardless  of  questions 
of  fault,  and  to  the  exclusion  of  every  "other  remedy,  proceeding  or  compensation, 
except  as  otherwise  provided  in  this  act;  and  to  that  end  all  civil  actions  and  civil 
causes  of  actions  for  such  personal  injury  and  all  jurisdiction  of  the  courts  of 
the  State  over  such  cases  are  hereby  abolished  except  as  in  this  act  provided." 

Surely,  Sir,  this  must  commend  itself  as  a  guide  for  administration  of  com- 
pensation, without  litigation,  such  as  any  one  having  at  heart  the  welfare  of  the 
workers  might  follow. 

Perhaps  the  best  feature  of  the  Washington  legislation  is  the  fact  that  it 
makes  for  the  prevention  of  accidents,  which  we  regard  as  more  important  than 
compensation.  The  taxing  of  industries  according  to  their  respective  risks,  is  an 
incentive  to  the  employers  to  reduce  the  risks,  which  means  a  reduction  of  the 
yearly  premium. 

It  is  only  by  making  risks  expensive  in  industry  to  employers  that  we  can 
hope  to  reduce  them  to  a  minimum. 

Contracting  out  clauses,  sub-contractors'  liability,  all  the  aggravating  ques- 
tions of  controversy  and  litigation,  could  be  obviated  by  provincial  compulsory 
insurance,  with  a  department  of  administration,  in  connection  with  which  the 
Provincial  Health  Department  could,  on  investigation  among  the  workers  of 
Ontario,  tabulate  what  are  occupational  diseases  in  our  own  Province. 

We  believe  that  an  act  modelled  upon  the  British  Act  in  principle,  with  the 
Compulsory  State  Insurance  of  the  Washington  Act,  with  its  police  administration, 
and  tax  upon  industry,  as  a  preventive  for  accidents,  would  be  the  best  for  the 
workers  as  well  as  for  the  employers. 

With  regard  to  the  sums  of  compensation  in  the  schedules,  we  will  be  willing, 
if  you  decide  on  the  British  Act  altogether,  to  work  out  the  payments  for  Ontario, 
taking  into  consideration  the  different  financial  proportions  of  wages  and  cost  of 
living. 

We  would  say,  however,  that  if  you  follow  the  British  Act  completely  it  should 
cover  all  workers  in  Ontario  getting  less  ttian  $2,000  a  year. 

If  on  the  other  hand  you  should  favour  the  act  of  the  State  of  Washington  we 
will  endeavour  to  prove  to  you  that  some  of  the  payments  made  by  the  month  are 
too  low. 

Anything  less  than  either  of  these  two  acts  will  he  inadequate  to  meet  the 
needs  of  the  workers  of  Ontario,  and  as  this  Province  is  the  manufacturing  centre 
of  our  Dominion,  we  claim  that  the  legislation  that  should  be  adopted  and  which 
we  desire  is  that  pointed  out  by  the  fundamental  principles  we  have  laid  down  for 
your  consideration. 

Any  further  evidence  you  may  need  we  will  be  only  too  pleased  to  procure, 
and  we  ask  you  to  request  our  co-operation  for  this  purpose  at  any  time. 

The  Commissioner:  Do  you  understand  exactly  what  they  mean?  As  I 
understand  it  they  mean  that  the  individual  employer  shall  be  answerable  for  all 
accidents  happening  whether  they  happen  through  the  fault  of  the  employee  or  not, 
if  they  arise  out  of  and  in  the  course  of  his  employment,  and  instead  of  insur- 
ing with  accident  insurance  companies  they  effect  insurance  with  the  State  against 
that  individual  liability.     That  differs  widely  from  the  Washington  scheme.     The 


176  MINUTES  OF  EVIDENCE:  No.  65 

Washington  scheme  does  not  involve  any  individual  liability  by  the  employer  at 
all.     There  is  a  graduated  tax  which  is  based  upon    the    risk    pertaining    to    the 
different  industries  that  are  mentioned,  and  when  the  employer  contributes  that 
he  satisfies  all  that  he  is  called  upon  to  do. 
Mr.  Wake:  That  appears  to  be  so. 

The  Commissioner  :  Their  proposition  is  a  composite  one,  part  State  of 
Washington  and  part  British  Act. 

Mr.  Ware:  Yes,  I  noticed  that  apparent  discrepancy  in  discussing  it.  The 
object  of  the  insurance,  as  I  understand  it,  is  to  provide  a  fund  which  is  always 
certain  and  always  available  for  the  purpose  of  satisfying  the  damages. 

The  Commissioner:  That  would  not  be  their  scheme  as  I  understand  this. 
Say  John  Smith  is  an  employer  of  labour.  He  is  bound  to  insure  all  his  men  with 
the  State  Insurance  Department.  Then  when  an  accident  happens  that  fund, 
whatever  his  insurance  is,  provides  for  the  injured  employee  or  his  dependants, 
as  the  case  may  be.  I  would  like  if  you  would  find  that  out.  Perhaps  I  can  ascer- 
tain it  nearer  home,  from  Mr.  Bancroft  who  is  the  leading  man  in  Toronto  deal- 
ing with  the  subject  on  behalf  of  the  labour  men.  If  there  is  to  be  a  tax  have  you 
any  suggestion  to  make  as*  to  how  that  tax  should  be  collected  ?  Are  you  going  to 
make  the  Government  a  tax  collector  to  collect  from  every  employer  of  labour,  the 
man  who  employs  a  large  number  and  the  man  who  employs  from  one  to  five  men? 
Mr.  Ware  :  According  to  the  suggestion  there  the  taxes  are  to  be  levied  on 
the  yearly  pay  roll. 

The  Commissioner:     Who  is  to  collect  it? 

Mr.  Ware  :  There  is  no  suggestion  as  to  that.  This  is  a  matter  to  be  worked 
out  in  the  machinery  of  the  Act.  The  Government  would  naturally  be  the  best 
party  to  collect  it. 

The  Commissioner:    I  should  think  the  result  of  that  would  be  to  turn  out 

any  existing  Government,  if  they  started  to  collect  taxes  from  everybody  employing 

one,  two  or  three  men.    It  would  be  lucky  if  it  comes  immediately  after  an  election. 

Mr.  Ware  :    If  your  Lordship  would  care  to  hear  some  of  the  individual  men 

they  might  have  some  ideas. 

Mr.  Botly  :  I  represent  Local  145,  Miners'  Union.  Referring  to  this  ques- 
tion of  who  shall  collect  the  taxes  it  is  an  undoubted  fact  that  the  Government, 
so  far  as  we  have  seen,  has  no  difficulty  whatsoever  in  collecting  taxes  for  other 
purposes  than  for  the  cause  of  labor,  and  I  think  if  there  should  be  experienced 
any  difficulty  by  the  officials  of  the  Government,  either  of  Ontario  or  Canada,  in 
collecting  taxes  for  the  purpose  of  benefiting  the  cause  of  labour.  I  think  the  cause 
thereof  lies  not  so  much  on  the  face  of  it  in  their  inability  to  raise  that  tax,  as 
their  nnfamiliarity  with  the  cause  for  which  that  taxation  is  to  be  levied.  Now, 
this  perhaps  one  of  the  first  actual  labour  reforms  that  has  been  instituted  in 
this  country.  I  agree  with  Mr.  Commissioner  that  it  is  perhaps  one  of  the  most 
important  pieces  of  legislation  that  was  ever  proposed  in  the  Province  of  Ontario. 
We  regard  it,  speaking  as  a  Union,  as  the  thin  end  of  the  wedge,  and  I  have  no 
hesitation  right  here  in  saying  that  we  intend  to  demand,  to  ask,  for  all  we  think 
that  we  can  possibly  get.  We  consider  that  we  have  been  labouring  for  years  in  this 
country  under  an  injustice  in  that  we  have  been  compelled  to  work  for  our  masters 
on  whatever  terms  they  chose  to  dictate,  in  the  majority  of  cases,  and  then  when 
wo  were  injured  Ave  had  to  have  recourse  to  the  courts  in  which  courts  we  have  no 
representation  whatsoever.  Now,  with  regard  to  this  proposition  as  to  how  we 
are  (o  levy  the  taxes,  I  believe  there  is  a  system  or  a  law  on  the  statute  books  of 
the  British  Isles  which  compels,  in  the  event  of  a  receipt  being  given  for  over  the 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  177 

sum  of  $10  or  two  pounds,  that  a  stamp  bo  placed  upon  the  receipt,  and  the  receipt 
is  not  legal  without  that  stamp  is  thereon  placed,  and  I  think  therefore  we  mighl 
find  a  very  reasonable  way  in  which  to  collect  this  tax,  by  instituting  a  system 
of  stamping  the  pay  roll.  That  is,  stamping  the  pay  receipts  of  each  employer  with 
a  stamp  of  a  certain  valuation.  I  think  that  would  be  a  very  equitable  way  ol 
collecting  his  tax.  In  the  event  of  any  employer  asking  a  receipt  from  an  employee 
for  his  wages  without  placing  that  stamp  thereon  you  could  make  the  receipt 
invalid,  and  the  employee  could  come  back  for  the  full  amount  of  back  wages. 

The  Commissioner:  A  workman  is  injured,  and  it  is  manifest  to  his  Unior 
that  he  is  injured  owing  to  his  own  grops  carelessness  and  disobedience  of  rules 
Is  it  just  that  he  should  be  in  as  good  a  position  as  the  man  who  does  not  violat< 
rules  or  is  not  grossly  careless? 

Me.  Botly  :  I  submit  to  you  in  this  form  of  production  that  we  now  have 
it  is  presumed  that  the  employer  of  labour,  by  virtue  of  the  fact  that  he  is  ar 
employer  of  labour,  therefore  controls  that  industry.  He  does  not  hesitate  to  ?a) 
that  he  has  the  right  to  control  the  revenue  from  that  industry,  and  that  being 
the  case  he  certainly  should  accept  the  full  responsibility  for  the  way  in  which  tha 
industry  is  carried  on.  Incidentally  also  he  should  accept  the  full  responsibility 
for  the  class  of  employees  that  he  employs,  and  if  he  chooses  to  employ  suet 
employees  as  are  not  suitable  for  the  craft  or  occupation  they  follow  I  maintain 
and  I  think  the  rank  and  file  of  the  membership  is  behind  me,  that  the  employe! 
and  he  alone  is  responsible. 

The  Commissioner:  Take  an  individual  man.  He  may  be  the  most  skilfu 
man  in  the  mine,  but  he  deliberately  goes  to  work  under  dangerous  conditions  ant 
invites  Providence  to  strike  him.  How  should  that  man  be  compensated?  Shoulc 
he  be  compensated  in  the  same  way  as  the  man  who  takes  reasonable  care  ? 

Mr.  Botly  :  I  come  from  a  mining  camp  which,  in  my  opinion,  is  the  mos 
dangerous  mining  camp  in  New  Ontario,  and  we  have  Government  appointee 
mines  inspectors.  On  the  train  on  which  I  came  down  there  was  a  man  came  dowi 
in  a  coffin.  How  he  died  I  don't  know,  but  I  do  know  there  are  instances  when 
men  are  killed,  and  something  should  be  done  to  prevent  it,  I  know  one  persona 
friend  of  mine  that  got  injured.  He  didn't  say  anything  very  much  about  it,  bu 
he  was  injured  by  falling  rock,  and  I  submit  to  you  that  if  this  legislation  is  passe< 
and  the  State  does  institute  a  system  of  State  Insurance,  if  the  State  thereby  i 
compelled  to  pay  that  insurance.  I  think  the  State  will  do  far  more  towards  pre 
venting  accidents,  both  of  death  and  any  other  nature,  than  they  are  doing  at  th< 
present  time. 

The  Commissioner  :  Well,  one  of  the  arguments  against  State  insurance 
is  that  it  does  not  provide  any  incentive  to  protect  the  lives  and  limbs  of  employees 
A  man  goes  on  carelessly,  and  he  is  on  the  risk,  he  gets  his  compensation  just  tb 
same,  whether  he  is  careless  or  not. 

Mr.  Botly  :  There  is  machinery  right  in  this  Province  for  the  inspection  o: 
mines,  factories  and  mills,  and  I  know  of  numerous  cases  where  accidents  occur 
and  those  works  have  never  been  inspected  as  far  as  I  know.  We  could  get  n< 
information  whatsoever.  I  think  this,  that  if  the  State  was  responsible  fo 
the  compensation  to  be  paid  that  the  State  itself  would  attend  to  this  question  o 
the  conditions  under  which  the  men  work. 

The  Commissioner  :  Do  you  not  think  there  is  some  duty  owed  by  the  mai 
who  labours  to  assist  as  a  member  of  society  in  minimizing  the  cost  and  lesseninj 
the  cost  of  production?    Does  he  not  owe  some  duty  to  society? 

Mr.  Botly  :  I  do  not  quite  follow  that.  If  it  is  a  fact  that  it  is  the  duty  o 
12  L. 


178  MINUTES  OF  EVIDENCE:  No.  65 


the  labouring  man  to  lessen  the  cost  of  production  it  is,  therefore,  the  duty  of  the 
employer  to  increase  the  return  to  the  labourer,  and  we  do  not  find  that  being  in- 
stituted here  in  any  case.  Every  increase  in  wages  we  have  obtained  we  have  had 
to  fight  for,  and  to  fight  hard  for.  I  maintain,  on  the  other  hand,  that  the  in- 
terests of  the  laborer  and  the  master  are  not  identical,  and  are  practically  opposed 
in  every  direction. 

Mr.  Cohen:  At  the  mine  I  represent,  and  other  mines,  I  think,  in  Cobalt, 
we  voluntarily  have  given  employees  a  bonus  on  the  earnings  of  the  company.  We 
have  also  provided  for  the  insurance  of  the  men.  In  reply  to  the  statement  made 
by  the  last  speaker  I  may  say  this  wasn't  done  on  any  demand ;  it  was  done  volun- 
tarily by  the  company  who  felt  the  men  were  entitled  to  a  profit.  The  mine  is 
not  a  Union  mine.  We  have  nothing  against  the  Union,  but  we  don't  feel  we  have 
much  in  common  with  them.  I  just  make  that  point  in  contradiction  of  Mr. 
Botly's  statement. 

Mr.  Gatjthier  :     In  reference  to  the  collection  of  that  tax  which  is  referred 
to,  I  think  it  could  be  very  easily  collected  if  the  Government  made  up  its  mind 
to  have  it.     I  will  give  you  an  instance.     When  the  mines  were  collecting  fees  for 
the  hospital  they  collected  it,  and  if  the  Government  insists  on  having  the  em- 
ployer collect  that  tax  that  can  be  collected.     Now,  the  point  I  want  tp  make  is 
according  to  number  7  in  that  article,  I  think  it  is.    I  would  be  in  favor  of  putting 
the  cost  eventually  upon  the  employer  solely.    Now,  that  may  sound  queer,  but  still 
1  have  a  few  arguments  to  put  up,  and  I  think  some  of  the  employers  will  realize 
when  I  am  through  that  they  would  benefit  by  it.     Now,  you  are  insuring  your  men 
to-day.     Why?     For  the  simple  reason  you  do  not  want  to  pay  the  costs  of  the 
accidents  which  your  men  go  through,  and  now  the  insurance  company  has  got  to 
do  the  fighting.     I  have  been  secretary  of  the  Masters'  Union  for  three  years  and 
a  half,  and  I  know  a  little  about  that  business,  and  that  is  why  I  am  stating  these 
facts.     The  point  is  the  insurance  governs  the  amount  paid  for  accidents  to  your 
employees.     Now,  if  the  employer  paid  the  ratio  of  insurance  to  the  provincial  in- 
surance company,  which  would  be  governed  by  the  government,  provided  of  course 
that  the  Government  would  have  to  provide  a  fund  for  a  start,  but  I  am  of  the 
opinion  that  if  this  was  done  the  employer  would  see  that  his  mine  or  his  mill  or 
(lis  factory,  or  any  other  proposition  of  which  he  is  the  master,  would  be  properly 
run.    That  ratio  of  insurance  would  be  governed  by  the  number  of  accidents  or  the 
cost  of  the  accident,  which  means  the  less  accidents  the  less  cost,  and  the  ratio 
would  be  lessened,  and  therefore  I  think  the  employer  would  benefit,  and  so  would 
the  employee.     I  will  say  something  later  if  I  am  given  the  opportunity- 

The  Commissioner  :  What  would  you  do  if  an  inspector  goes  out  and  takes 
two  men  with  him  to  work?  How  would  you  provide  if  his  man  is  injured?  How 
would  you  provide  for  raising  money  to  pay  for  that?  A  couple  of  men  go  out 
together  and  they  hire  a  couple  of  men  to  go  with  them,  and  one  of  the  men  is 
killed,  it  may  ho  through  carelessness  or  without  the  fault  of  anybody,  but  he  is 
killed  while  the  operation  is  going  on.  How  would  that  case  be  provided  for? 
Take  the  case  of  a  prospector? 

Mr.  Gautiiier:  The  prospector  would  have  to  insure  his  two  men  before  he 
takes  them  with  him. 

The  Commissioner:  Would  it  not  be  pretty  difficult  to  get  all  these  little 
things  in? 


them. 


Mr.  Gautiiiki!:     But  he  would  have  to  insure  the  men  before  he  goes  with 


1912  WOK  KM  UN'S  COMPENSATION  COMMISSION.  179 

—i 

The  Commissioner:  Well,  take  the  employer  himself?  They  are  all  about 
on  the  same  plane.  One  happens  to  work  for  wages  and  the  other  works  for  what 
he  gets.  Supposing  the  prospector  gets  killed  he  gets  nothing  and  his  dependants 
are  left  without  anything. 

Mr.  Gauthier:  In  that  ease  the  prospector  is  not  a  working  man.  He  is 
working  for  himself. 

The  Commissioner:     That  would  not  be  much  consolation  to  his  family. 

Mr.  Gauthier:    Well,  he  is  taking  chances  to  get  dollars. 

The  Commissioner  :     We  are  all  *taking  chances  for  the  matter  of  that. 

Mr.  Gauthier  :  The  majority  of  the  workers  to-day  are  making  a  fight  for 
a  living  and  they  haven't  got  a  chance  to  get  the  dollars.  All  they  earn  is  a  mere 
living.  The  majority  of  the  workers  are  getting  a  mere  existence.  This  camp 
is  a  prosperous  camp.  Why?  Because  the  wages  are  high.  It  has  been  stated  that 
in  the  cities  there  is  more  misery,  but  when  there  is  more  money  in  circulation, 
although  the  cost  of  living  is  high,  still  the  living  is  better. 

Mr.  G.  W.  Mahon:  I  represent  the  Timiskaming  Mine  Managers'  Associa- 
tion. That  is  an  Association  consisting  of  twenty-one,  or  practically  all  the  ship- 
ping mines  in  the  Cobalt  camp.  In  submitting  their  propositions  to  your  Lord- 
ship I  may  make  some  admissions,  or  go  even  further  than  possibly  the  workmen 
think  the  mine  managers  would  be  prepared  to  do,  or  possibly  what  your  Lordship 
would  think  they  were  willing  to  do.  In  the  first  place  they  are  willing  to  admit 
that  the  employer,  in  so  far  as  it  relates  to  the  mining  industry,  and  that  is  all  I 
am  speaking  in  regard  to — in  so  far  as  it  relates  to  the  mining  industry  the  em- 
ployer has  a  responsibility  in  respect  to  his  employees,  and  even  in  the  case  of  where 
an  employee  is  guilty  of  contributory  negligence  they  are  willing  to  assume  a  cer- 
tain responsibility  and  make  certain  compensation  to  thje  dependants  of  an  employee 
who  may  be  killed  even  by  his  own  contributory  negligence.  The  amount,  however, 
would  he  very  considerably  smaller  than  it  would  be  in  the  case  of  any  other  acci- 
dent, that  they  would  be  willing  to  assume.  The  next  point  is  that  in  regard  to 
the  mining  industry, — which  is  different  from  any  other  industry  in  the  manu- 
facturing field, — it  is  generally  conceded  in  the  discussion  on  Workmen's  Compen- 
sation Acts  that  any  liberal  act  imposing  heavy  burdens  to  meet  the  damages  that 
may  result  from  accidents  adds  to  the  cost  of  production,  and  in  manufacturing 
establishments  particularly  that  added  cost  can  be  met  by  adding  it  to  the  cost  of 
production  and  charging  it  up  to  the  consumer,  the  general  public.  In  the  case  of 
metal  mining  particularly  the  mine  owners  have  absolutely  no  control  over  the  price 
of  its  output.  They  control  it  in  no  way  whatever,  and  if  too  heavy  a  burden  is 
placed  upon  them  by  a  Workmen's  Compensation  Act  there  would  be  the  danger 
of  them  reimbursing  themselves  by  a  reduction  in  the  wage.  A  high  wage  is  paid 
to  the  mine  workers  by  reason  of  the  fact  that  it  is  a  hazardous  occupation,  but  if 
they  are  going  to  be  obliged  to  pay  a  big  wage  because  it  is  a  hazardous  occupation, 
and  then  compensate  in  every  instance  a  heavy  compensation,  the  tendency  would 
be  to  reduce  the  wages  of  the  mine  workers,  the  employees,  and  hence  a  too  liberal 
Workmen's  Compensation  Act  might  he  a  disadvantage  rather  than  an  advantage 
to  the  workmen  in  the  metal  mines.  My  next  point  would  be  that  it  would  be  ad- 
visable, if  possible,  in  any  Workmen's  Compensation  Act  to  have  a  separate  pro- 
vision for  the  mines,  or  at  least  a  separate  schedule,  and  keep  it  separate  from  other 
industries,  so  as  to  protect  the  employer,  particularly  if  any  provision  is  made  for 
payment  to  employees  or  the  dependants  of  employees  who  have  been  guilty  of  con- 
tributory negligence.  The  employers  should  be  protected  so  that  the  employees  will 
not  grow  careless,  feeling  that  there  will  be  compensation  in  any  event.       Then 


180  MINUTES  OF  EVIDENCE:  Xo.  65 

v 

there  should  be  a  very  rigid  inspection  and  frequent  inspection  of  mines,  and  the 
work  being  carried  on  by  the  employees  as  well  as  by  the  employers,  so  that  there 
would  be  certain  inspection,  and  that  that  expense  should  be  borne  by  the  Govern- 
ment for  that  rigid  inspection.  I  know  in  one  mine  in  the  camp  at  the  present 
time,  in  addition  to  the  fact  that  there  is  the  daily  inspection  required  by  the  act 
by  the  captain  or  shift  boss,  they  have  taken  on  another  employee  solely  for  the  pur- 
pose of  walking  through  the  mine  and  inspecting  the  mine  to  see  that  no  one  is 
growing  careless  in  his  work  and  endangering  their  lives,  and  I  submit  there  should 
be  some  such  method  adopted  if  there  is  to  be  any  added  burden  of  any  moment 
placed  upon  the  mining  industry.  There  should  be  very  frequent,  in  fact  almost 
daily  inspection  of  the  mine. 

Now  the  Association  suggests  if  there  is  a  revision  of  the  Workmen's  Com- 
pensation Act,  such  a  revision  should  be  based  rather  upon  the  New  Zealand  Act 
of  1908.  That  has  been  taken  fly  reason  of  the  fact,  as  is  well  known,  that  the 
New  Zealand  legislation  is  an  advanced  legislation,  and  it  is  suggested  that  that 
act  should  be  taken  as  the  basis  for  the  amendment  of  the  Workmen's  Compensa- 
tion Act.  Certain  modifications  of  course  would  have  to  be  made  in  the  schedule 
as  to  the  compensation  for  various  injuries,  and  it  is  suggested  that  instead  of 
taking  the  New  Zealand  Act,  that  the  schedule,  which  is  very  complete  and  very 
full,  as  set  out  in  the  Act  of  Eussia,  1903,  should  be  adopted,  instead  of  the 
schedule  as  appended  to  the  New  Zealand  Act.  I  have  the  schedules  here.  I  do 
not  know  whether  your  Lordship  has  seen  it. 

The  Commissioner  :     I  have  seen  that  book,  yes. 

Mr.  Mahon:  It  is  set  out  very  completely,  and  provides  for  every  possible 
accident,  and  gives  a  rate  of  so  much  per  cent,  on  total  disability,  or  death,  and 
it  is  suggested  that  such  a  schedule  as  that  should  be  adopted  in  connection  with 
the  adoption  of  the  New  Zealand  Act, 

The  Commissioner:  I  was  told  a  short  time  ago  of  a  very  peculiar  accident 
to  a  man,  where  gangrene  set  in  after  the  injury  and  he  lost  both  his  legs.  Would 
it  be  governed  by  the  ultimate  injury  or  by  the  primary  injury? 

Mr.  Mahon:  I  believe  the  New  Zealand  Act  provides  that  if  the  parties 
agree  upon  the  amount  or  scale  of  compensation — or  it  may  be  the  Norwegian — 
that  the  settlement  may  be  revised,  I  think  it  is  every  three  years. 

The  Commissioner  :  A  man  might  lose  a  finger,  and  that  might  be  a  simple 
thing,  but  it  might  result  in  serious  consequences.  Would  each  accident  by  which 
a  finger  is  lost  be  compensated  for  just  the  same,  no  matter  what  the  results  are? 

Mr.  Mahon  :  I  would  say  if  it  eventually  caused  death  it  would  come  under 
the  death  compensation.  Every  three  years  there  is  a  revision,  and  if  during  that 
time  more  serious  results  have  resulted  from  the  more  trifling  accident,  then  it 
would  move  up  in  the  scale  according  to  the  schedule,  and  if  within  three  years 
death  resulted,  T  presume  then  the  maximum  would  be  paid. 

Now,  the  mine  managers  suggest  that  during  a  period  of  total  incapacity  the 
weekly  payment,  if  any,  should  not  commence  until  after  the  expiration  of  seven 
days.  That  is  the  same,  I  think,  as  in  the  British  Act,  and  also  the  New  Zealand 
Act. 

The  Commissioner  :  The  British  Act  as  introduced,  I  think,  was  fourteen 
days,  but  that  was  struck  out  in  the  House,  and  there  was  no  limit. 

Mr.  Maiion  :     In  New  Zenland  it  is  seven  days,  and  in  some  other  Acts. 

The  Commissioner:  In  some  of  the  American  Acts  it  is' seven  days,  and  no 
payment  unless  the  disability  continues  for  fourteen  days. 

Mi;.  Mahon:     Where  death  or  total  incapacity  results  from  an  accident  his 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  181 

_ 1 

total  dependants  should  receive  three  times  the  actual  average  yearly  earnings  of 
the  employee,  and  hy  total  dependants  as  denned  by  the  New  Zealand  Act,  I  mean 
those  who  have  no  other  source  of  income  whatever,  but  are  dependent  on  the  em- 
ployees, but  in  no  case  should  the  sum  to  be  payable  under  total  disability  be  less 
than  $1,000  or  more  than  $2,600.  That  is  basted  upon  three  times  the  average 
earnings  of  an  employee  in  this  camp. 

The  Commissioner:  That  would  be  going  back  upon  our  present  legisla- 
tion, which  is  three  years  or  $1,500,  whichever  is  the  larger. 

Mr.  Mahon:  In  no  case  should  it  be  less  than  one  thousand  dollars,  no  mat- 
ter what  their  yearly  earnings  should  be. 

The  Commissioner:     As  it  is  now  it  never  can  be  less  than  $1,500. 

Mr.  Mahon  :  That  is  true,  but  the  maximum  would  be  $2,600,  which  would 
be  practically  three  times  the  average  yearly  wage  of  a  man  in  this  camp.  That 
meets  the  objection  raised  by  one  of  the  previous  speakers,  that  the  schedule  would 
have  to  be  revised  from  the  British  Act  to  suit  the  wages  here.  I  have  a  statement 
here  which  shows  in  the  twelve  mines  in  the  past  year  the  average  yearly  wage  was 
$869,  and  three  times  that  would  be  approximately  $2,600. 

Then  during  the  period  in  case  of  death  and  incapacity  the  weekly  payment, 
if  any,  should  commence  to  be  paid  not  until  a  period  of  seven  days,  and  then 
should  be  at  the  rate  of  50  per  cent,  of  his  average  weekly  earnings. 

The  Commissioner  :     You  would  have  his  wages  run  on  for  those  seven  days  ? 

Mr.  Mahon  :  Some  companies  pay  that,  but  in  no  case  should  the  total 
amount  be  under  the  weekly  payment  except  the  death  and  maximum,  and  in  the 
case  of  death  finally  resulting  the  amount  paid  under  these  weekly  payments 
should  be  deducted  from  the  maximum  amount  he  would  receive.  Then  we  say 
that  the  New  Zealand  Act  should  be  altered  in  this  respect.  By  section  10,  I 
think  it  is,  of  the  New  Zealand  Act  very  broad  provisions  are  made  for  the  payment 
of  compensation  in  cases  of  disease.  We  say  that  should  be  eliminated  as  open- 
ing the  door  altogether  too  wide  for  fraud. 

The  Commissioner:  You  must  have  some  provision  for  occupational  dis- 
ease.    Take  the  tanners,  for  instance. 

Mr.  Mahon  :  If  it  is  strictly  confined  to  occupational  diseases  there  would 
not  be  the  same  serious  objection  to  it,  although  even  then  it  has  been  found,  I 
understand  from  those  who  have  had  experience,  there  is  a  door  opened  pretty 
wide  for  fraud  on  the  part  of  the  employees,  if  they  desire  to  take  advantage  of  such. 
If  it  is  confined  very  strictly  to  occupational  diseases  there  would  not  be  the  same 
objection,  but  the  New  Zealand  Act,  it  seems  to  me,  to  be  very  wide  in  that  respect, 
and  extends  for  a  period  of  twelve  months  after  the  employee  leaves  the  employer's 
employment,  he  is  still  responsible.  There  should  be,  I  think,  a  limit  placed  upon 
that  and  confined  very  strictly  to  occupational  diseases. 

Then  the  provision  in  the  New  Zealand  Act  is  entirely  satisfactory  fo  the 
mine  managers  upon  the  point  raised  by  one  of  the  previous  speakers  as  to  con- 
tractor and  principal.  They  are  jointly  and  severally  liable,  and  the  contractor 
shall  indemnify  the  principal.  The  mine  managers  are  willing  to  make  this  state- 
ment, that  compensation  according  to  the  schedule  shall  be  paid  whether  the  em- 
ployer shall  prove  negligence  or  not  on  the  part  of  the  employee.  So  long  as  the 
accident  happens  he  can  receive  compensation  according  to  the  schedule  which 
would  be  appended  to  the  act.  In  the  Now  Zealand  Act  it  say?  no  compensation 
shall  be  paid  in  the  case  of  serious  or  wilful  misconduct. 

The  Commissioner  :     The  same  as  the  British  Act. 


182  MINUTES  OF  EVIDENCE:  No.  65 

1 

Mr.  Mahox  :  In  that  ease  the  Timiskaming  mine  managers  say  in  ease  of 
his  total  incapacity,  or  in  case  of  his  death,  they  would  be  willing  to  submit  to  a 
payment  to  the  dependants  of  a  certain  percentage  of  the  regular  schedule,  say  15 
per  cent,  of  what  he  would  otherwise  receive,  he  or  his  dependants,  in  case  of  total 
incapacity.     In  the  case  of  partial  incapacity  or  temporary — - 

The  Commissioner  :  I  suppose  that  would  mean  where  the  injury  was  due 
wholly  to  the  misconduct  of  the  employee? 

Mr.  Mahon:    Yes. 

The  Commissioner  :  As  to  contributory  negligence  it  seems  to  be  almost 
common  ground  that  that  must  go. 

Mr,  Mahon:    Yes,  that  is  the  idea. 

Mr.  Botly  :     In  the  event  of  an  employer  working  in  a  mill,  say  a  saw  mill — 

Mr.  Mahon  :     I  am  only  considering  mines. 

Mr.  Botly:  1  am  familiar  with  the  milling  industry,  and  that  is  why  I  said 
that-  In  the  event  of  an  employee  seeing  a  notice  placed  up  by  an  employer,  we  will 
say  over  an  exposed  shaft,  to  keep  away  from  this  shaft.  Would  it  be  considered 
wilful  misconduct  if  the  employee  in  the  course  of  his  employment  went  near  that 
exposed  shaft  and  got  caught  in  it.  or,  on  the  other  hand,  would  it  be  necessary 
before  the  employee  would  be  guilty  of  misconduct  to  have  a  guard  rail  placed 
around  it,  or  something  placed  over  it  ?  Would  it  be  necessary  for  the  employee  to 
'do  tampering  with  the  shaft  itself? 

Mr.  Mahon:  The  Factories  Act  provides  what  shall  be  guarded  and  what 
shall  not,  and  if  the  owner  does  not  guard  what  should  be  guarded,  it  does  not 
matter  how  many  notices  he  puts  up,  he  does  not  escape  responsibility. 

The  Commissioner  :  This  gentleman  does  not  seem  to  see  the  force  of  the 
word  "wilful."  If  a  man  was  working  around  that  shaft,  and  not  thinking,  got 
pretty  near  it  and  got  hurt,  that  would  not  be  wilful.  Wilful  means  he  knows  what 
he  is  doing,  intending  to  do  what  he  does.  But  supposing  the  notice  was  up  there, 
and  the  man  deliberately  and  with  his  eyes  open,  knowing  it  was  dangerous,  and 
seeing  it  there,  walked  up  and  came  too  close,  that  probably  would  come  under  the 
definition  of  wilful  misconduct,  or  wilful  violation  of  the  rule. 

Mr.  Gauthier  :  I  would  like  to  ask  the  counsel  here  if  a  man,  for  instance, 
scratches  his  hand,  and  we  will  concede  that  there  are  poisonous  germs,  which  occurs 
very  frequently  in  the  camp  here,  and  through  this  little  scratch  he  gets  blood 
poison  and  dies,  would  lie  get  remuneration  for  that  under  the  act. 

Mr.  Mahon:  My  instructions  are  that  that  clause  in  the  New  Zealand  Act 
should  be  struck  out. 

The  Commissioner:  The  case  that  Mr.  Gauthier  points  out  is  covered  by 
the  present  act,  and  ho  would  be  compensated  for  the  injury.  The  present  law 
would  look  after  him  in  that  case,  as  I  understand  it. 

Mr.  Mahon  :  Then  as  to  the  procedure  for  determining  what  particular 
heading  of  the  schedule  each  individual  accident  would  come  under,  it  is  suggested 
that  if  the  parties  cannot  agree,  with  the  schedule  as  full  and  complete  as  it  is 
made  in  the  Uussian  Act — if  they  cannot  agree  the  matter  should  be  adjudicated 
upon  by  the  County  judge,  quite  irrespective  of  the  amount  involved;  and  either 
party  might  on  application  to  him  ask  for  a  date  of  hearing  when  all  parties  could 
be  heard,  and  the  hearing  should  be  heard  at  the  most  suitable  place  near  where 
the  accident  occurred. 

Then  as  to  all  lump  sums, — if  they  are  not  paid  in  weekly  payments,  all  lump 
sums  to  be  paid  to  parties  in  settlement,  particularly  to  dependants,  should  be  paid 
into  court   and   apportioned    by   the   County  or   District    judge   among  the   various 


1912  WOKKMENS  COMPENSATION   COMMISSION.  183 


classes  of  the  dependants,  and  there  should  be  the  right  of  appeal  from  the  decision 
or  any  ruling  of  the  County  or  District  judge.  There  should  be  one  righl  of  ap- 
peal to  the  Divisional  Court,  and  neither  party,  to  have  any  further  right  of  appeal. 

The  last  suggestion  1  have  to  make,  and  perhaps  your  Lordship  can  set  me 
right  as  to  whether  it  is  in  the  power  of  the  Provincial  Legislature  to  include  in 
the  act  that  no  employee  should  have'the  right  of  action  at  common  law?  There 
would  be  just  one  remedy. 

The  Commisioner :  That  would  be  perfectly  competent,  to  substitute  it.  It 
is  there  at  present. 

Mil.  Mahon:  Then  as  to  conditions  that  exist  here,  this  is  a  report  taken 
from  the  twelve  mines  for  22  months,  from  January  1st,  1910,  to  January  1st, 
1911,  and  it  sets  forth  the  average  number  of  men  employed  is  2,201;  the  average 
wage  per  year  per  man  amounts  to  $869.  The  total  wages  for  the  22  months  was 
$3,263,788.  The  average  premium  rate  paid  to  the  liability  companies  now  is 
2.12. 

The  Commissioner:     What  is  the  gross  amount? 

Mr.  Mahon:  The  total  amount  for  premiums  for  the  22  months  was  $69,- 
267.37,  and  during  that  time  the  liability  companies  have  paid  out  in  insurance 
$20,490,  which  includes  some  that  are  still  pending. 

The  Commissioner:     You  include  those  as  if  they  had  been  paid? 

Mr.  Mahon:  Yes.  There  are  some  still  under  adjustment,  but  we  conclude 
that  the  full  amount  will  be  paid. 

Under  the  schedule  as  outlined  here,  under  the  act,  there  would  at  the  s.iiue 
time  have  been  paid  out  of  that  sum  for  premiums  of  $69,000  odd,  $40,341,  or 
over  double,  or  practically  double  the  insurance  that  the  liability  companies  have 
paid  in  compensation. 

The  Commissioner:     Under  your  suggestion? 

Mr.  Mahon  :     Yes,  under  our  suggestion. 

The  Commissioner:  What  does  that  tax  upon  the  industry  amount  to.  that 
$69,000?  Have  you  got  anything  to  show  what  that  percentage  bears  to  the  net 
profit  of  the  mines? 

Mr.  Mahon:  No,  T  haven't.  It  is  based  upon  the  pay-roll.  It  i-  two 
decimal  something.  It  is  a  little  over  2  per  cent,  on  the  industry,  assuming  that 
every  company  would  carry  employers'  liability  policies. 

The  Commissioner:    What  is  that  percentage  of? 

Mr.  Mahon  :     Of  the  gross  wage,  the  pay-roll. 

The  Commissioner  :  I  wanted  to  know  how  much  of  a  burden  it  is  upon  the 
industry? 

Mr.  Mahon  :     That  can  be  worked  out,  I  think. 

Then  I  have  some  figures  here  as  to  the  accidents  which  have  happened,  and 
so  on,  during  the  same  length  of  time.  Incapacity  for  less  than  eight  days,  84 
cases;  incapacity  for  more  than  seven  days  and  less  than  fifteen  days,  32  cases; 
incapacity  for  more  than  two  weeks  and  not  over  four  weeks,  28  cases :  incapacity 
between  four  weeks  and  eight  weeks,  9  cases;  incapacity  between  eight  weeks  and 
26  weeks,  6  cases;  permanent  and  total  disability,  2;  permanent  and  partial  dis- 
ability, 3,  etc.  That  is  during  the  22  months  for  those  twelve  mines.  (Statement 
handed  to  the  Commissioner.) 

The  Commissioner  :  Mr.  Corkill  was  telling  me  about  48  altogether  for  the 
Province. 

Mr.  Mahon:  This  is  just  the  twelve  mines  of  the  Timiskaming  Mine  Man- 
agers' Association,  returns  of  which  we  got. 


184  MINUTES  OF  EVIDENCE:  No    «5 

As  regards  State  Insurance  I  have  no  direct  instructions,  but  so  far  as  the 
Mine  Managers'  Association  is  concerned  there  is  no  doubt  they  would  just  as 
soon  pay  the  same  premiums  into  State  insurance  as  they  would  into  a  private 
company. 

I  do  not  know  that  I  have  anything  further  to  add. 

The  Commissioner:  I  do  not  suppose  anybody  has  figured  this  out,  but 
supposing  there  was  a  Department  of  State  Insurance,  what  difference  would  there 
be  in  the  cost  to  the  State  of  managing  the  fund?  It  must  make  quite  a  differ- 
ence. 

Me.  O'Connell:  Some  two  months  ago  I  read  in  the  New  York  Sun  an 
article  giving  the  gross  returns  from  all  the  employers'  liability  companies  in  the 
United  States,  and  it  showed  the  greater  number  of  companies  operating  there. 
There  is  much  more  keen  competition  for  business  and  the  industries  are  very 
much  larger,  but  it  would  give  you  some  sort  of  idea  of  what  the  revenue  and  ex- 
penses were.  If  I  remember  correctly  the  gross  premiums  paid  into  these  com- 
panies were  $96,400,000.  Of  this  amount  only  $41,000,000  were  paid  in  settlement 
of  claims,  and  lawyers'  fees  amounted  to  the  huge  sum  of  $11,000,000,  and  there 
were  other  costs  which  were  very  much  larger,  and  the  profits  were  something  like 
$20,000,000  odd.  That  is  just  a  portion  of  all  the  liability  companies  operating  in 
the  United  States.  In  this  country  the  matter  would  have  to  be  worked  out  by  in- 
surance actuaries,  whether  the  business  could  be  carried  on  as  a  sound  business  pro- 
position or  not,  or  whether  they  would  have  to  seek  aid  from  the  State  or  the 
Province.  The  mining  industry,  as  you  know,  with  the  exception  of  coal  and  iron 
mining,  is  fluctuating  and  not  stable.  As  you  all  know  the  longer  you  work  a  mine 
the  nearer  you  come  to  the  end.  You  can't  eat  your  cake  and  have  it.  The  camp 
of  Cobalt  has  been  operating  now  for  the  past  seven  years.  During  the  year  1901 
the  operation  was  only  prelimiary  and  very  slight,  but  since  that  time  it  has 
assumed  very  much  larger  proportions  than  was  once  thought  it  would.  It  has 
been  stated  by  people  who  are  competent  to  judge  that  possibly  in  the  year  191 2 
or  the  year  1913  the  industry  will  reach  the  peak  of  production  in  this  camp.  That 
is  a  matter  that  only  the  final  figures  for  those  years  will  show.  The  industry  is 
not  on  the  wane  yet,  and  operations  here  will  continue  for  a  number  of  years,  bur 
just  how  many  I  would  not  venture  to  guess,  because  it  would  be  a  mere  guess. 
As  regards  the  position  of  the  employers  and  the  employees,  speaking  only  as  the 
manager  of  the  Trethewey  mine  which  I  represent,  and  as  a  member  only  of  the 
Timiskaming  Mine  Managers,  I  beg  to  submit  the  following  views.  I  think  I 
speak  without  prejudice  when  I  say  the  employers  are  as  willing  as  the  employees 
to  have  such  legislation  as  the  Province  proposes  to  enact  and  to  put  in  force.  We 
are  all  human,  and  while  there  has  been  sometimes  clashes  between  the  mines  and 
the  employees,  it  has  never  lasted  very  long,  and  I  might  say  now  that  the  labour 
we  have  in  this  camp  is  as  efficient,  and  perhaps  more  efficient,  than  any  other 
part  of  the  Province  of  Ontario.  The  hazards  of  the  occupation,  as  our  counsel 
stated,  are  great,  but  the  wages  are  proportionately  great.  The  lowest  wage  we 
pay,  I  believe,  is  around  $2.25  a  day.  Some  of  the  men  work  ten  hours  and  some 
eight  hours  and  some  nine  hours.  I  think  there  has  been  some  statement  made  in 
the  newspapers  that  the  Government  now  in  power  propose  to  enact  an  eight  hour 
day.  Of  course  that  is  not  before  us  now,  and  outside  the  question,  but  the  propo- 
sition of  the  Govermnenl  in  selecting  you,  sir,  to  take  testimony  in  regard  to  this 
thing  we  regard  as  a  wise  and  beneficent  thing.  Personally  we  are  paying,  as  stated 
by  our  counsel,  the  sum  of  $69,000  for  premiums  for  22  months  to  these  insur- 
ance companies.     Some  of  the  companies  do  not   carry  any  insurance,  and   while 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  185 

_ ( 

the}'  may  make  a  little  money  by  remitting  this  premium  for  a  time  we  believe  it 
is  right,  and  while  some  of  the  employees  who  are  hitter  think  we  want  to  beat  them 
out  of  their  lives,  we  regard  it  as  insurance  on  his  own  life  "for  the  benefit  of  his 
family.     We  regard  it  similarly  to  life  insurance. 

Now,  when  we  made  these  statements  through  our  counsel  to-day,  I  may  say 
we  had  them  compiled  at  some  considerable  expense  and  time,  and  we  are  willing 
to  submit  the  statements  to  you,  and  they  are  open  to  any  criticism,  and  we  can 
show  where  we  got  the  figures.  They  were  supplied  by  the  separate  mines  as  the 
average.  There  is  no  desire  on  the  part  of  the  operators  of  this  district  to  hinder 
matters.  On  the  contrary  they  fully  desire  to  help  and  assist  in  every  way  they 
can  to  have  a  full  and  complete  solution  of  this  vexed  problem,  and  I  think  I  voice 
the  sentiments  of  the  other  members  of  the  Association  when  I  make  these  state- 
ments. 

The  Commissioner:  I  suppose  there  would  be  no  objection  to  your  giving 
to  Mr.  Ware  a  copy  of  that. 

Mr.  O'Connell:  No.  Further,  your  Lordship,  we  have  statements  showing 
all  the  causes  of  these  accidents,  and  we  can  give  you  all  that  data. 

The  Commissioner:  Do  you  think  the  feeling  between  the  employer  and 
the  employee  is  what  one  gentleman  speaking  as  a  workingman  has  said,  that  it  is 
practically  eternal  warfare? 

Mr.  O'Connell:  That  is  the  socialistic  side  of  the  story.  I  have  been  a 
member  of  the  Miners'  Union.  I  started  in  the  mine  and  worked  just  as  all  these 
other  men  are  working,  and  I  don't  think  so.  Without  prejudice  to  anybody  here, 
because  we  are  friendly  to  every  man  that  works  in  this  country,  I  think  labour  has 
divided  itself  into  two  camps.  There  is  the  socialistic  and  the  non-socialistic. 
There  are  lots  of  good  men  working  in  this  country  who  are  not  in  the  Miners' 
Union,  and  they  are  not  represented  here  because  they  are  all  at  their  jobs.  They 
are  getting  good  pay  and  they  are  working.  There  are  some  of  the  men  ai  our 
mine  who  are  not  members  and  they  could  have  come  if  they  wanted  to,  but  thev 
didn't  come.  It  is  the  socialistic  men  who  make  those  statements.  The  men  here 
are  good  workmen,  because  they  couldn't  hold  their  jobs  if  they  weren't.  Every 
job  stands  on  its  own  bottom  here".  The  mine  managers  are  not  against  the  Union. 
We  have  only  had  one  strike  in  this  camp  in  seven  years,  and  there  is  no  feeling 
against  them.  The  companies  that  Mr.  Cohen  and  Mr.  Rogers  represent  give  their 
men  a  bonus.  The  Crown  Reserve  pays  their  men  five  per  cent,  of  their  salary,  to 
every  man  that  works  for  a  year.  That  does  not  look  like  bitter  warfare.  The 
Coniagas  pay  their  employees  four  per  cent.  There  is  no  bitter  warfare.  There 
is  no  tendency  of  that  kind  on  the  part  of  the  employers.  I  think  all  the  men  are 
fair,  but  we  all  do  not  think  alike,  and  it  is  probably  for  the  good  of  the  world 
that  we  don't,  or  there  wouldn't  be  much  progress.  Some  of  them  are  disgruntled, 
but  taking  it  all  through  the  camp  I  think  that  we  have  more  satisfied  workers  in 
this  camp  than  any  other  part  of  the  Province  of  Ontario.  That  is  a  poor  policy, 
and  it  does  not  exist  to  my  mind. 

Mr.  Kingswell:  I  mined  for  fifteen  years  in  New  Zealand,  and  I  am  thor- 
oughly conversant  with  the  Act  there,  and  the  only  weak  part  of  our  act  is  the 
compensation  for  accidents.  That  is  how  they  determine  what  a  man  should  have 
Now,  the  Government  there  say  that  a  mine  manager  shall  have  three  years  under- 
ground experience  before  they  will  issue  to  him  his  mine  manager's  certificate. 
Now,  I  suffered  an  accident  in  New  Zealand:  I  had  my  leg  smashed,  and  the  In- 
surance Company  that  was  in  that  mine  fought  me  for  two  years,  because  they 
said  if  they  paid  me,  every  man  in  the  mine,  or  who  was  connected  with  that  mine, 
would  have  to  be  paid  if  there  was  any  accident  happened  there.     They  fought  me 


186  MINUTES  OF  EVIDENCE:  No.  65 

because  they  did  not  wish  to  pay  the  other  men.  I  was  laid  up  fourteen  months 
by  my  accident  to  that  leg,  by  bad  timbering,  and  that  company  fought  me  for 
two  years,  and  they  beat  me  because  I  hadn't  the  money  to  carry  it  through.  It 
cost  me  several  thousand  dollars. 

Mr.  O'Connell  :  That  was  some  years  ago.  Wasn't  that  before  the  present 
act  came  in? 

Mr.  Kingswell:     That  was  the  insurance  company. 

Mr.  O'Connell  :     It  was  before  the  Government  insurance  ? 

Mr.  Kingswell:  Yes,  it  was  the  insurance  company.  That  is  the  danger 
of  that  system.  I  am  a  practical  miner  myself,  and  the  inspector  in  New  Zealand 
had  never  been  a  mine  manager,  and  he  didn't  know  what  a  sill  was.  A  sill  is  tim- 
bers put  in  to  hold  up  the  ground,  and  he  didn't  know  what  a  sill  was.  Now,  an 
inspector  who  does  not  know  what  a  sill  is  should  be  put  out  of  his  place,  and  a 
practical  man  put  in.  The  insurance  companies  will  fight  the  men  on  every  occa- 
sion, and  that  is  the  whole  point,"  If  you  can  take  that  New  Zealand  Act  it  is  the 
grandest  act  in  the  world  aside  from  that,  and  in  my  estimation  I  think  the  Gov- 
ernment should  take  that  question  up  and  have  thoroughly  practical  miners  so  as 
to  be  able  to  settle  that  question.  I  have  seen  a  mine  manager  right  in  this  camp 
who  said  that  a  hitch  was  in  the  hanging  wall,  and  anybody  knows  if  a  man  puts 
a  hitch  in  a  hanging  wall  he  doesn't  know  anything  about  mining.  If  they  have 
experienced  men  then  the  miner  has  a  chance,  hut  if  he  has  to  fight  the  insurance 
company,  there  you  are. 

Mr.  Mahon  :  I  think  Mr.  Kingswell  must  be  speaking  before  the  time  of  the 
present  act. 

Mr.  Kingswell  :     Yes,  that  is  twelve  years  ago. 

Mr.  Mahon  :  Any  dispute  that  arises  under  the  New  Zealand  Act  now  is  re- 
ferred to  a  court  of  arbitration,  which  prevents  any  long  litigation,  and  our  pro- 
position is  to  submit  it  to  the  District  judge  who  will  investigate,  and  the  judge 
will  come  up  to  the  place  of  the  accident,  rather  than  a  whole  lot  of  witnesses  com- 
ing to  the  judge,  and  then  only  one  appeal  to  the  Divisional  Court,  which  as  your 
Lordship  knows,  is  comparatively  inexpensive. 

Mr.  O'Connell:  Further  in  reply  to  Mr.  Kingswell's  statement  the  propo- 
sition of  the  operators  here  is  to  have  the  Russian  schedule  which  provides  for  just 
such  a  case. 

Mr.  Botly  :  He  says  there  is  no  bitter  warfare  between  the  employer  and 
the  employee  in  this  country.  Of  course  we  are  not  here  to  discuss  socialism.  We 
are  here  to  discuss  workmen's  compensation  to  the  working  class,  and  that  being 
the  case  I  do  not  think  it  is  quite  relevant,  but,  at  the  same  time,  I  consider  myself 
justified  in  making  a  few  remarks  upon  the  question.  He  makes  the  statement  that 
there  has  been  only  one  strike  in  this  camp  in  seven  years. 

Mr.  O'Connell:     One  real  strike. 

Mr.  Botly  :  And  ho  advanced  the  theory  that  the  employers  and  the  em- 
ployees are  like  the  lion  and  the  lamb,  the  lion  lying  down  with  the  young  sheep 
That  is  a  delusion.  Now,  I  maintain  where  you  have  had  a  strike  in  seven  years, 
especially  where  there  is  a  strike  like  that,  it  is  a  concrete  instance  to  show  that 
the  employer  and  the  employee  are  not  on  friendly  terms,  and  T  am  not  ashamed 
to  Bay  that  1  am  not    friendly  with  the  employers. 

Mr.  O'CONNELL:     Do  yon   work?     What  mine  do  you  work  at? 

Me.  Botly:     T  have  never  worked  in  this  Cobalt  camp. 

Mr-  O'Connell:     Sure  you  haven't? 

Mr.  Botly:  As  far  as  my  work  here  is  concerned,  I  want  to  inform  my 
friends  I  worked  in  the  Cobalt  camp  up  till  1003,  and  1  quit  working  in  the  Cobalt 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  187 

camp  when  the  strike  came  up.    1  am  not  like  a  whole  lot  more.     I  can't  be  bull- 
dosed  into  taking  a  job  under  conditions  where  they  are  not  favourable. 

The  Commissioner:     Perhaps  Mr.  Maguire  has  something  to  say? 

Mr.  J.  P.  Maguire  :  While  I  quite  understand  we  are  not  here  to  debate 
the  class  struggle,  yet  I  wish  to  call  attention  to  this  significant  fact,  that  when 
we  are  in  a  position  to  debate  on  those  subjects  our  friends  are  conspicuous  by 
their  absence,  and  I  may  say  I  am  quite  willing  to  meet  anyone  if  they  wish  to 
participate  in  such  a  debate.  But  coming  to  the  question,  I  object  as  a  working- 
man,  and  as  a  man  who  has  worked  in  the  Cobalt  camp  until  I  was  blacklisted  and 
can't  work  any  longer,  and  you  can  take  that  home — as  a  workingman  I  object  to 
those  provisos  in  regard  to  negligence  on  the  part  of  workingmen,  not  as  a  question 
of  the  justice  or  injustice  of  it,  because  I  must  confess  that  the  lines  of  justice 
and  injustice  are  very  largely  lost  in  our  complicated  modern  system,  but  for  this 
reason  that  these  provisos  as  to  the  negligence  on  the  part  of  the  employer  or  em- 
ployee leave  the  possibility  of  a  law  suit,  and  when  we  get  into  law  we  always 
know  who  comes  out  best.  We  know  the  man  with  the  money  and  the  man  with 
the  influence  comes  out  on  top,  and  we  know  the  District  judge  who  is  supposed 
'to  settle  this  is  invariably  not  a  member  of  the  working  class,  but  a  member  of 
the  wealthy  class  himself,  and  the  consequence  is — 

The  Commissioner:  He  is  the  hardest  worker  of  the  lot,  the  judge  is;  he 
works  all  the  time. 

Mr.  Maguire  :  Well,  your  Lordship,  you  work  under  a  different  environment 
than  we  do  and  consequently  you  see  things  from  a  different  standpoint.  I  may 
say  further  that  our  Conservative  politicians  have  gone  forth  and  told  the  people — 
and  I  read  their  speeches  with  much  interest — that  they  would  introduce  a  Work- 
men's Compensation  Act  without  provisos,  which  would  allow  a  man  to  be  com- 
pensated for  injuries.  Now,  your  Lordship,  I  wish  to  impress  this  point  very 
deeply  upon  you,  that  while  I  am  afraid  that  politicians  after  election  can  change 
their  complexions  as  well  as  their  shoes,  still  I  think  your  Lordship  will  assist 
those  politicians  to  keep  to  their  promises,  and  see  that  they  introduce  an  Act  that 
will  be  of  real  benefit  to  the  working  people,  because  I  hold  most  emphatically  that 
any  act  that  permits  of  litigation  or  legal  entanglements  betwieen  those  two  classes 
is  not 'beneficial  to  the  working  class. 

The  Commissioner  :  One  of  the  great  difficulties,  Mr.  Maguire,  that  has 
been  felt  all  over  is  in  determining  how  far  claims  are  honest;  whether  the  man 
is  really  as  bad  as  he  represents  himself  to  be.  In  England  now  fhey  have  some- 
what solved  that  because  the  judge — they  have  no  jury  in  England  at  all — the 
judge  may  call  upon  a  medical  officer  to  examine  a  man  and  he  may  act  upon  that 
medical  man's  advice. 

Mr.  Maguire:     Is  his  decision  final? 

The  Commissioner:  If  the  judge  chooses  to  adopt  it-  He  may  adopt  it 
against  the  evidence  of  the  man. 

Mr.  Maguire:     He  takes  that  information,  and  he  gives  his  decision? 

The  Commissioner:     He  appoints  :an  impartial  man. 

There  have  been  one  or  two  remarks  made  here  on  each  side  that  I  think  are 
not  very  desirable  to  remain  unchallenged,  or  to  have  such  an  impression  abroad, 
that  because  a  judge  is  not  of  the  labouring  class  therefore  the  labouring  man  will 
not  get  justice  when  he  comes  before  the  court.  That  is  a  libel  upon  the  admin- 
istration of  justice  in  this  country.  It  has  never  been  so.  I  venture  to  say  that 
as  a  whole  the  sympathies,  as  far  as  a  judge  is  permitted  to  have  sympathies,  have 
been  with  the  working  man,  and  where  they  have  had  to  determine  against  him  in 


188  MINUTES  OF  EVIDENCE:  No.  G5 

hard  cases  it  is  because  they  have  been  compelled  by  the  law  to  do  so.  You  might 
just  as  well  say  that  a  tribunal,  because  it  had  not  an  employer  of  labour  upon  it, 
was  not  a  fair  tribunal. 

Me.  O'Connell  :  As  an  instance  of  that  I  might  s»ay  at  the  mine  where  I  am 
now  manager,  sometime  during  the  spring  there  was  a  man,  a  Frenchman  named 
LePage,  was  employed  to  do  some  painting  at  the  mine,  and  we  had  never  been 
able  to  determine  whether  he  had  received  instructions  plainly  or  not.  At  any  rate 
the  man  was  a  man  of  very  good  intelligence  and  a  man  that  was  paid  $3  at  his 
trade,  and  he  was  represented  to  be  a  good  workman.  He  was  told  to  paint  the 
outside  trimmer  of  the  transformer  house  of  the  Trethewey  mine,  and  he  fin- 
ished first  of  all  the  trimmings  of  the  windows  and  doors,  and  then  he  was  where 
the  high  tension  comes  in  to  transform  the  current  from  15,000  volts  down  to  150 
volts,  which  is  the  voltage  that  the  motors  use.  He  got  up  there  and  he  painted 
everything  within  ten  inches,  and  his  foot  slipped  on  something  and  he  fell 
on  the  dead  lines  which  were  going  in  and  the  other  three  phaze  line  was  charged 
with  15,000  volts,  and  he  was  all  but  off  when  his  hand  struck  the  15,000  volt  line, 
and  immediately  the  current  hit  him.  It  doubled  him  up  and  he  went  right  over 
on  the  15,000  volt  line,  and  one  of  the  other  workmen  came  up  to  push  him  of  with 
a  dry  board,  and  his  feet  were  dry,  but  one  of  the  heads  of  the  department  fearing 
he  would  be  killed,  too,  told  him  not  to  do  it.  Well,  it  has  been  a  mooted  question 
since  about  that.  Electrical  men  say  if  they  had  pushed  him  off  he  probably  would 
have  recovered,  but  anyway  the  man  was  killed.  The  case  came  up  in  the  court 
at  North  Bay  and  the  judge  there  awarded  damages  against  the  company  of  $4,000, 
and  the  case  is  now  in  appeal.  We  will  never  know  whether  it  was  contributory 
negligence  or  what  it  was,  because  there  was  no  one  there  at  the  time.  At  any 
rate  the  judge  in  assessing  the  damages  took  a  fair  way.  He  was  getting  $3  a  day, 
and  assuming  he  could  work  250  days  a  year  it  would  be  $750,  and  then  he  took 
his  possible  life  on  the  actuaries*  table,  and  he  had  a  boy  about  something  like 
eleven  years,  and  he  figured  out  also  when  the  boy  would  be  able  to  earn  something 
for  his  mother,  and  gave  judgment  for  $4,000. 

Me.  Maguire  :  I  don't  want  it  understood  that  I  am  casting  any  reflection 
on  the  ability  or  the  integrity  of  the  courts  of  our  country,  but  I  do  say  that  judg- 
ment is  a  concept  of  things.  It  is  not  anything  that  is  concrete.  As  your  Lord- 
ship is  no  doubt  familiar  with  history  you  will  know  that  the  concepts  of  justice 
have  changed  just  as  often  as  corresponding  conditions  have  changed.  Your  Lord- 
ship is  well  aware  of  that  fact,  and  I  hold  the  concept  of  justice  that  your  Lord- 
ship holds  at  the  present  time  may  change,  and  the  concept  of  justice  that  the 
working  men  hold  is  at  variance  with  your  concept  of  justice.  It  is  not  one  con- 
cept of  justice  by  any  means. 

The  Commissioner :     How  do  you  know  that? 

Mr.  Maguiee:  Judging  by  the  decisions  that  are  handed  down  by  our  courts 
of  which  yon  are  a  member.  We  don't  attack  your  honesty  or  integrity  in  any 
way. 

The  Commissioner:  Well,  you  think  a  court  is  entitled  to  do  natural  justice, 
l)ii t  tbo  court  lias  no  such  power.  The  court  is  confined  to  administering  justice 
according  to  tin'  law,  and  a  jndge  sitting  would  have  no  more  right  in  determining 
a  case  contrary  to  the  law  than  he  would  have  to  go  to  you  and  take  out  of  your 
pocket  your  money.  The  fault  is  not  in  the  administration  of  justice:  you  must 
change  your  law.     It  is  the  law  that  is  at  fault. 

Mb.  MAGUIEE:  You  know  our  laws  are  such  that  they  can  be  interpreted  and 
re-interpreted  to  suit  the  idiosyncrasies  of  those  who  interpret  them. 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  189 

Mr.  A.  Smith:  Willi  reference  to  the  discussion  with  Mr.  Malum  I  would 
like  to  mention  one  point,  as  to  the  primary  or  ultimate  injury.  1  haven't  had 
the  privilege  of  considering  the  New  Zealand  Act,  as  recommended"  by  the  Associa- 
tion, and  I  don't  know  what  your  Lordship's  Commission  is  considering,  hut  from 
my  little  experience  of  accidents  and  the  accident  insurance  business  I  am 
impressed  with  one  thing,  and  that  is  that  an  employer  of  labour  should  be  respon- 
sible only  for  the  primary  loss.  There  is  undoubtedly  a  very  large  amount  of  loss 
of  life  and  valuable  time  to  people  who  meet  with  a  trilling  injury  and  through 
ignorance  or  prejudice  or  carelessness  or  unsanitary  conditions  or  constitutional 
complications  sustain  serious  loss  from  what  was  only  a  trilling  injury,  and  that 
loss  the  employer  in  all  justice  should  not  be  responsible  for.  There  are  in  these 
days,  we  know,  advocates  of  a  cult  of  philosophy  or  medicine,  or  what  you  please, 
who  will  not  consult  a  physician,  and  who  will  magnify  a  loss  by  what  they  believe 
to  be  an  approved  procedure  and  in  reality  neglecting  to  give  it  scientific  attention. 
It  is  the  commonest  thing  in  the  world  for  a  scratch  of  the  hand  that  is  perhaps 
•inflicted  with  a  septic  tool,  by  neglect  and  failure  to  dress  it,  and  failure  to  treat 
it  properly,  becoming  infected.  Perhaps  it  is  mere  uncleanliness  of  the  injured 
person,  but  it  results  in  blood  poison,  loss  of  limb,  loss  of  life,  and  it  is  an  exag- 
gerated loss.  If  the  employer  were  to  be  responsible  for  the  ultimate  loss  resulting 
tfrom  every  accident  of  employment,  he  should  have  the  power  to  regulate  the 
injured  man's  personal  conduct  and  care  of  his  injury  from  the  time  of  its  receipt. 
Anything  that  is  fairly  and  justly  traceable  to  direct  and  unavoidable  result  of 
the  accident  might  be  properly  included,  but  I  would  think  otherwise  it  would  be 
a  hardship  and  injustice. 

Mr.  Mahon  :  There  is  a  provision  in  the  New  Zealand  Act  that  any  one  who 
will  wilfully  abstain  from  having  medical  or  surgical  attendance  loses  his  right  to 
any  further  compensation.    I  think  it  is  the  New  Zealand  Act. 

The  Commissioner:  Mr.  Ware,  do  you  understand  that  such  a  provision 
as  is  suggested  by  the  Unions  you  represent  and  by  the  Toronto  and  Dominion 
bodies,  would  be  in  substitution  of  existing  rights?  In  other  words  il  such  a  law 
as  that  is  passed  would  there  accompany  it  a  cancellation  of  the  common  law 
obligation  on  the  employer? 

Mr.  Ware  :    With  regard  to  the  insurance  ? 

The  Commissioner:     You  prefer  compensation  with  State  insurance. 

Mr.  Ware:    Yes. 

The  Commissioner:  They  would  secure  whatever  the  act  provides  for  an 
employee  when  he  is  injured.  Is  he  to  take  that  in  lieu  of  any  other  right  the  he 
has  got  now,  or  may  he  elect  to  take  what  the  law  would  give  him  with  the  disad- 
vantages of  the  doctrine  of  common  employment  and  contributory  negligence,  if 
he  chose  to  take  that? 

Mr.  Ware  :  Well,  as  I  understand  the  proposals  it  would  be  in  lieu  of  the 
common  law  liability.  The  common  law  liability  is  so  restricted  now  that  it 
is  difficult  to  get  any  compensation  under  it. 

The  Commissioner:  They  run  side  by  side  in  England.  The  common  law 
liability  is  not  gone,  and  if  a  man  fails  to  recover  under  the  act,  he  may  under 
certain  circumstances  proceed  on  his  common  law  right,  if  he  has  any. 

Mr.  Ware  :    I  understand  that  is  the  case  here  in  Ontario. 

The  Commissioner:  One  of  the  things  that  there  is  so  much  trouble  about 
is  this  notice  of  the  accident,  which  is  very  often  unjustly  used  to  the  prejudice  of 
the  man  that  is  injured.  It  is  sometimes  too  strict  in  the  time  the  notice  was 
required.     Now,  I  cannot  imagine,  unless  a  man  is  inventing  an  injury,  that  if 


190  MINUTES  OF  EVIDENCE:  No.  65 

there  is  an  injury  happens  to  a  man  that  it  would  not  be  known  to  the  managers 
of  the  mine. 

Mr-  O'Connell:  Small  things  sometimes  happen  ,  and  they  might  have 
after-results  which  would  come  back. 

Mk.  Ware:     There  is  nothing  serious  happens  which  they  do  not  know. 

Mr.  O'Connell  :    No,  but  it  is  a  possibility. 

Mr.  Ware  :  There  is  another  point  which  my  clients  desire  me  to  mention, 
and  that  is  this:  in  some  mines  people  apply  for  employment  and  they  do  not  give 
a  correct  representation  as  to  their  experience,  and  the  consequence  is  we  find 
that  incompetent  men  are  placed  in  positions  of  control  and  trust  in  the  mine, 
where  they  direct  the  men,  which  they  are  unfitted  for  and  incompetent  to  fill, 
and  as  a  consequence  of  their  directing  of  the  work  and  the  control  of  the  men 
accidents  happen,  and  the  mine  is  put  in  a  much  more  dangerous  condition,  or 
allowed  to  get  into  a  much  more  dangerous  condition  than  if  competent  men  were 
employed. 

The  Commissioner:  What  do  the  workers  do  when  that  state  of  things 
arises?    Are  they  dumb,  or  do  they  make  a  complaint  to  the  manager? 

Mr.  Ware:  Well,  it  is  very  seldom  complaints  are  made  by  the  working  men 
of  the  men  above  them.     I  don't  think  that  is  a  common  thing. 

Mr.  O'Connell:  The  point  you  wish  to  make,  for  instance,  is  there  is  a  law 
on  the  statute  books  here  that  every  man  that  runs  a  boiler  over  a  certain  number 
of  horse  power  should  have  a  certificate,  and  the  government  is  very  lax  in  those 
things.  They  never  come  and  see.  The  mines  try  to  get  men  of  that  kind,  but  they 
can't  always  get  them. 

The  Commissioner:    Do  you  mean  a  man  in  the  mine? 

Mr.  Ware:  One  speaker  gave  an  illustration  of  a  man  who  didn't  know  a  sill. 
That  is  what  I  mean,  and  that  is  the  point  I  want  to  make,  that  there  are  often 
incompetent  men,  and  there  should  be  I  believe  some  provision  either  in  this  act 
or  in  the  Mines'  Act  that  none  but  experienced  men  should  be  employed. 

The  Commissioner:  Would  that  not  be  along  the  lines  of  the  views  sug- 
gested of  having  better  Government  inspection? 

Mr.  O'Connell  :    That  is  the  thing. 

The  Commissioner:  And  then  give  that  inspector  the  right  to  see  that  men 
in  positions  of  trust  are  fit  for  the  positions,  and  to  require  him  to  be  sent  away  if 
he  is  not.    I  don't  suppose  there  would  be  any  objection  to  that. 

Mr.  O'Connell  :  No,  and  another  thing,  and  I  voice  this  question  as  a  per- 
sonal view  on  the  matter,  and  without  prejudice,  or  without  any  idea  of  criticis- 
ing the  Department  of  Mines  at  all.  This  camp  lias  been  operating  for  some  seven 
years,  and  some  six  years  ago  Mr.  Corkill  was  made  Chief  Inspector,  but  as  you  all 
know  the  Province  of  Ontario  is  very  large,  and  the  number  of  operating  mines 
in  the  Province  are  far  greater — greater  by  ten  times  than  they  were  five  years 
ago —  and  I  do  not  think  the  (iovcrnment  is  treating  the  mine  operators  fairly,  and 
I  don't  think  they  are  treating  the  mine  managers  fairly,  or  treating  themselves 
fairly  when  they  are  so  niggardly  with  their  appropriation  for  the  inspectors. 
They  ask  an  inspector  to  work  for  a  salary  that  he  can  get  running  a  grill  in  this 
mine,  and  I  don't  think  it  is  fair.  The  men  who  are  inspectors  are  competent, 
Faithful  men.  and  they  are  not  paid  properly  or  in  proportion  to  the  Labour  they 
lender.  It  is  a  physical  impossibility  for  Mr.  Corkill  to  come  up  bore  every  time 
a  little  accident  happens,  as  he  is  supposed  to  do  now.  and  it  is  an  enormous  waste 
of  labour  and  time.  I  am  .-peaking  personally  of  course,  hut  I  think  it  would  be  \';w 
better   for  the   mine  workers  and   the  mine  operators   if  there  was  a  good   resident 


1912  WORKMEN'S  COMPENSATION  COMMISSION".  191 

. — — — . 1 

inspector  in  a  camp  of  a  certain  size  who  would  make  at  least  a  monthly  inspec- 
tion of  every  mine  in  the  camp.  1  think  it  would  he  hotter  for  the  workers  and  the 
employers,  and  if  that  point  could  he  brought  hefore  the  Government  in  the  form 
of  a  memorial,  or  through  your  Lordship,  I  think  we  would  he  benefited  by  it. 

Mr.  Gauthier:  I  think  the  argument  that  our  representative  has  put  up 
there  is  weak  in  this  way,  that  the  mine  managers  or  the  mill  operators,  or  any 
other  operators,  have  sub-bosses.  They  have  shift  bosses,  and  it  is  the  duty  of 
these  men  to  see  they  do  their  work,  and  put  the  men  to  work,  and  let  me  tell  you 
if  they  don't  do  their  work  in  a  few  hours  the  shift  boss  will  fire  them.  That  is 
what  they  have  shift  bosses  for,  and  they  go  around  the  men  whlo  are  drifting  and 
raising  and  so  on,  and  if  the  shift  boss  does  his  duty  he  watches  the  men  put  in  the 
mine  by  the  operator,  and  if  they  don't  do  their  .work  properly  it  is  his  duty  to 
fire  them. 

Mr.  Kingswell:  In  New  Zealand  the  Miners'  Union  can  have  one  inspector 
of  their  own.  They  have  an  inspector  in  every  district  in  New  Zealand  which  has 
more  than  four  mines,  and  it  is  the  duty  of  that  inspector  or  head  man  of  the 
Union  to  listen  to  the  complaints  of  the  men,  and  see  if  they  are  reasonable- 
That  man  is  allowed  to  go  down  to  the  men  at  the  discretion  of  the  mine  owners, 
of  course-  If  they  are  timbering  a  mine,  of  course  he  couldn't  go  down,  but  he  is 
allowed  to  go  down  to  examine  the  conditions,  and  he  represents  to  the  Govern- 
ment if  the  mine  is  safe.  I  may  say  New  Zealand  is  the  worst  country  for  mining 
accidents,  but  they  have  an  inspection  of  the  mine  every  day,  if  they  want  it. 

Mr.  Botly  :  I  would  suggest  that  the  mine  owners  of  this  camp  have  refused 
to  recognize  the  Miners'  Union. 

The  Commissioner  :  Do  I  understand,  Mr.  Gauthier,  you  would  be  opposed 
to  better  inspection  of  the  mine  by  the  Government? 

Mr.  Gauthier:  No,  certainly  not.  I  am  certainly  humanitarian,  and  I  am 
against  accidents  of  any  kind,  and  I  believe  if  a  man  gives  his  hard  labor  he  should 
be  protected.  It  doesn't  matter  how  the  protection  comes.  Speaking  as  an  officer 
in  the  Miners'  Union  here,  we  pay  sick  benefits,  and  I  say  the  less  accidents  the 
better  for  all  workers,  and  the  life  and  limbs  of  these  workers  that  go  down  and 
breathe  the  had  air,  and  work  for  eight  and  nine  and  ten  hours,  should  be  pro- 
tected. There  is  a  little  correction  I  would  like  to  make.  Mr.  O'Connell  stated 
that  the  lowest  wage  was  $2.25  a  day,  and  I  may  say  there  are  men  working  in 
this  camp  for  $1.75. 

Mr.  O'Connell:     Underground? 

Mr.  Gauthier  :  No,  $2  underground.  But  I  am  not  opposed  to  any  measure 
that  would  provide  a  strict  inspection.  I  wish  they  had  about  15  mine  inspectors 
here,  and  we  would  have  less  accidents. 

Mr.  Maguire:  I  think  to  satisfy  your  Lordship  on  the  point  raised  by  Mr. 
Gauthier,  Mr.  Gauthier  takes  the  position  that  there  should  not  be  any  specific 
inspection  of  the  employees  before  they  go  to  work.  That  is  to  say  they  should 
not  have  to  give  evidence  that  they  are  up  to  a  certain  standard,  or  they  should  not 
have  to  give  evidence  that  they  have  been  working  so  long,  because  if  I  was  hungry 
I  would  tell  a  man  I  could  make  watches,  and  it  would  only  be  a  loophole  for  fraud. 

Mr.  Gauthier:     That  is  my  point. 

The  Commissioner  :  I  thought  the  suggestion  was  not  that  the  workingman 
would  have  to  he  inspected,  hut  the  men  put  in  positions  of  trust  would  be  inspected 
as  to  their  cmalifications. 


192  MINUTES  OF  EVIDENCE:  No.  65 

Mr.  Ware  :  I  didn't  get  quite  finished  with  what  I  was  saying  when  Mr. 
O'Connell  spoke.  I  intended  to  give  the  point  that  has  been  brought  out  by  Mr. 
Gauthier,  but  it  is  not  necessary  for  me  to  say  anything  more  on  it. 

Mr.  J.  Whalen:  There  is  a  little  ground  here  that  I  think  hasn't  been  cov- 
ered, and  I  think  it  is  a  most  vital  point  in  the  Compensation  Act.  It  is  with 
regard  to  the  carelessness  or  negligence  of  the  employee.  Now,  I  have  been  in 
places  where  men  have  been  insured  in  a  mine.  In  British  Columbia,  I  may  say, 
in  those  boundary  mines,  they  pay  his  compensation  whenever  it  is  due  without 
any  trouble,  and  this  is  the  way  they  go  about  it.  Their  foremen  and  their  man- 
agers and  their  shift  bosses  are  competent  to  do  their  work;  they  are  trained  men 
or  they  wouldn't  be  there;  they  have  had  a  lot  of  practical  experience,  which  is 
not  the  case  in  some  of  these  camps  around  here.  I  know  there  are  men  in  some 
of  these  camps  put  in  charge  of  workmen  who  know  nothing  at  all  about  it.  Now, 
I  think  the  companies  could  protect  themselves  in  this  way.  They  could  put  up  any 
apparatus  they  thought  fit,  and  they  could  instruct  their  foremen  and  shift  bosses 
to  look  after  all  new  men  especially,  and  see  that  they  were  not  negligent,  and  if 
they  were  negligent  discharge  them  right  away.  After  a  man  has  been  there  for 
some  length  of  time  and  has  proved  himself,  then  if  an  accident  happens  it  would 
strictly  be  up  to  him,  but  if  we  leave  this  loophole  for  the  company  to  say  that  in 
one  case  it  was  through  the  negligence  of  one  man  or  the  other,  why,  the  Compen- 
sation Act  for  us  will  not  amount  to  a  snap  of  your  fingers.      It  is  easily  proven. 

Mr.  O'Connell:  I  think  the  point  he  wants  to  make  is  that  there  should  be 
some  sort  of  inspection  or  supervision.  Mr.  Kingswell  instanced  a  case  where 
the  miner  had  to  have  a  certificate.  "Where  they  are  operating  coal  mines  such  a 
thing  is  in  force  by  reason  of  the  fact  that  coal  mining  conditions  are  much  more 
dangerous  by  reason  of  damp  and  explosions  and  they  have  all  got  to  get  certificates 
of  competency  before  they  assume  their  duties.  I  don't  know  whether  it  is  the 
intention  of  the  Government  to  bring  this  in  or  not,  but  if  it  is,  we  should  like  to 
be  heard  further  on  it. 

Mr.  Maguire  :  Who  is  going  to  give  a  man  a  certificate  that  he  is  compe- 
tent or  not? 

Mr.  Kingswell:  The  Inspector  of  the  Government.  I  could  question  you 
and  soon  see  whether  you  know  anything  or  not. 

Mr.  Maguire  :  I  think  it  would  resolve  itself  into  the  greatest  orators  having 
the  best  certificates,  and  not  the  practical  men. 

Mr.  Cohen  :  I  think  we  ought  to  take  into  consideration  here  that  the  min- 
ing business  is  a  special  business,  and  the  men  working  in  mines  are  mostly  sup- 
posed to  be  men  skilled  in  their  business,  and  they  get  ^compensated  to  a  greater 
degree  for  their  skill  and  fo"r  the  chances  they  take,  and  any  legislation  that  is 
made  should  take  the  mining  business  specially  into  consideration. 

Now,  in  factories  and  businesses  of  that  kind  where  it  is  possible  to  get 
unskilled  labour,  they  don't  get  the  money  that  the  men  in  the  mining  business  get. 
Some  of  the  labour  representatives  here  say  that  they  have  no  objection,  or 
would  have  no  objection  to  men  who  were  unskilled  going  into  the  mine  and  claim- 
ing they  had  skill  and  claiming  they  had  experience.  They  would  get  paid  for 
the  skill  they  were  supposed  to  have  and  they  would  add  to  the  danger  of  the 
other  men.  Now,  the  thing  seems  to  me  to  be  paradoxical.  They  are  either  miners 
or  not  miners,  and  if  they  are  getting  paid  in  one  way  for  the  hazard  they  take 
and  the  skill  they  have,  it  seems  to  me  that  any  legislation  that  is  made  should  be 
made  specially  for  the  particular  business.  If  we  pay  the  compensation  to  them 
in  wages  we  arc  practically  paying  insurance  to  them.  That  is  just  a  point  I  make 
as  a  mining  man. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  193 


Me.  Maguire:  Just  a  won!  in  reply  to  that.  1  may  say  what  the  average 
man  gets  in  wages  he  usually  spends  in  living.  Whether  he  does  it  judiciously 
or  injudiciously  is  not  the  question.  The  question  is  to  provide  something  for 
his  family.     The  average  miner  does  not  do  it,  and  that  is  the  question. 

Mr.  Kings Vvkll:  We  were  always  expected  as  shift  hosses  to  go  down  with 
the  men  to  see  if  they  are  miners,  and  if  they  are  not  we  put  them  out  of  the 
mine-  We  would  ask  a  man  to  put  dpwn  a  hole,  or  take  a  hammer,  and  we  would 
see  whether  he  could  strike  a  drill.  You  can  soon  tell  whether  a  man  is  a  miner 
or  not  when  he  starts  to  work.     That  is  the  way  they  did  in  Sow  Zealand. 

Mr;.  Maguire:  What  would  this  gentleman  do  with  a  man  like  Bill  Eoss? 
Bill  Eoss  was  a  blacksmith  and  yet  he  was  one  of  the  greatest  prize  drillers  that 
the  world  ever  knew.     How  would  he  get  along  with  him? 

The  Commissioner:     Is  there  any  miner  from  any  other  point? 

Mr.  Maguire:     I  am  in  addition  a  representative  from  Porcupine. 

The  Commissioner:  If  there  is  anybody  here  who  desires  to  say  anything 
do  not  hesitate.  I  am  here  to  hear  all,  and  I  do  not  want  anybody  to  go  away  and 
say  he  is  sorry  he  didn't  get  a  chance,  or  didn't  avail  himself  of  the  opportunity. 

Mr.  Gorman:  I  may  state  so  far  as  the  position  of  the  workingmen  of  this 
district  is  concerned,  they  desire  to  have  the  best  possible  act  they  can  seen  re 
from  the  Government  to  cover  this  Workmen's  Compensation.  I  may  state  that 
the  general  consensus  of  opinion  among  them  seems  to  be  that  contributory  negli- 
gence should  not  in  any  way  affect  the  payment  of  compensation  which  would  be 
provided  for  in  the  act,  because  if  there  is  a  loophole  left  for  any  litigation  it  follows 
that  those  with  means  are  in  a  far  better  position  to  fight  the  case  and  to  deprive 
the  workingman  of  the  revenue  and  the  amount,  than  what  the  workingman  is  in 
a  position  to  come  in  and  prove  his  claim,  and  in  fact  in  many  cases  in  the  courts 
it  might  possibly  be  construed  as  carelessness  where  it  is  only  a  matter  of  common 
occurrence  in  the  following  of  the  occupation  by  every  man.  A  man  may  often 
overlook  certain  points  which  may  be  construed  into  negligence  in  a  court  of  law, 
where  it  is  only  following  out  his  occupation.  I  might  state  that  the  Bussian  Act, 
as  defined,  seems  to  be  a  pretty  good  act,  as  far  as  I  understand,  except  inas- 
much as  labor  has  to  contribute,  and  we  held  that  the  employer  alone  should  con- 
tribute to  pay  for  any  accident  that  the  workman  is  a  victim  of,  just  as  much  as  to 
make  good  for  any  machinery  or  anything  else  that  is  put  out  of  commission. 

The  Commissioner:  In  a  camp  like  this  would  it  be  possible  that  some 
local  tribunal  upon  which  the  workman  and  the  mine  owners  would  be  represented, 
should  deal  with  all  claims  of  compensation  finally?  I  do  not  suppose  the  gentle- 
men may  lie  in  a  position  to  say  off-hand  as  to  what  the  view  would  be,  but  I  would 
like  both  sides  to  consider  that,  and  see  if  there  couldn't  be  some  kind  of  a  tribunal 
in  a  district  like  this  so  that  when  an  accident  happens  it  would  be  investigated 
immediately  and  dealt  with  on  the  spot. 

Mr.  Mahon  :    Without  any  right  of  appeal  whatever? 
The  Commissioner  :     Yes,  or  perhaps  a  very  limited  one. 
Mr.  Mahon:     I  should  think  as  far  as  the  mine  managers  are  concerned  they 
would  be  very  glad  if  there  were  some  such  Boards  appointed  locally. 

The  Commissioner:  In  the  State  of  Washington  they  have  a  board  where 
they  investigate  all  these  complaints. 

Mr.  Lothian:  In  the  event  of  a  case  coming  up  like  that  in  this  camp,  who 
would  select  the  men  to  take  the  case  of  the  men?  Would  the  representatives  of 
the  men  come  from  the  Miners'  Union?  The  Federation  of  Miners  here  is  not 
recognized. 

13  L. 


194  MINUTES  OF  EVIDENCE:  No.  65 

The  Commissioner:  In  a  case  of  that  kind  would  it  make  any  difference 
whether  a  man  was  a  Union  man  or  not?  Surely  he  would  be  in  sympathy  with 
labour. 

Mr-  Lothian  :  It  wouldn't  matter  to  me  as  long  as  the  man  got  the  compen- 
sation. 

The  Commissioner  :  Supposing  you  are  going  to  select  a  Board,  the  mine 
owners  would  choose  a  representative  on  that  Board,  and  the  mine  workers  would 
choose  another  member  of  that  Board.  It  would  not  do  to  exclude  the  Union 
men,  and  it  would  not  do  to  exclude  the  non-Union  men- 

Mr.  Lothian:  How  would  it  be  possible  for  the  non-Union  men  and  the 
Union  men  to  come  together? 

The  Commissioner:     I  suppose  they  could. 

Mr.  Lothian  :  They  are  not  together.  If  they  were  together  they  would  be 
Union  men. 

Mr.  Botly  :  The  Mine  Owners'  Association  at  Cobalt  does  not  include  all 
the  mine  owners  in  Cobalt,  and  in  that  case  they  are  accepted  as  competent  wit- 
nesses, I  presume,  for  what  you  might  call  the  defence  in  this  Compensation  Act 
case,  and  I  submit  to  you  why  should  it  not  be  as  reasonable  for  the  organization 
of  the  labour  men  in  this  camp  that  the  Cobalt  Miners'  Union  should  be  accepted 
as  witnesses  for  the  plaintiff,  as  you  might  put  it,  in  this  case? 

The  Commissioner:  It  wouldn't  be  witnesses  at  all.  It  would  have  to  be 
a  case  of  an  honest,  independent  Board  that  would  determine  according  to  the 
truth  and  the  right. 

Mr.  Botly:  I  presume  it  would  be  constituted  as  many  other  Arbitration 
Boards  are  constituted,  one  representative  from  one  side,  and  one  from  the  other, 
and  both  to  agree  upon  the  third. 

Mr.  Maguire  :  Just  a  word  on  the  question  you  ask  for  your  benefit.  This 
is  my  individual  opinion,  that  a  workingman  in  this  or  any  other  camp  who  does 
not  belong  to  a  labour  organization  where  one  exists,  either  hasn't  got  the  necessary 
amount  of  intelligence  to  see  the  situation  in  his  own  interests  as  a  workingman, 
or  if  he  has  the  intelligence  he  lacks  the  moral  courage  to  express  it,  and  such 
a  man  as  that  I  feel  would  for  either  one  or  the  other  reason  be  inclined  to  give  the 
benefit  of  the  doubt  to  the  mine  owner,  and  not  to  the  workingman. 

The  Commissioner  :  "Wouldn't  the  man,  on  the  other  hand,  say  I  haven't 
confidence  in  men  that  haven't  confidence  in  themselves;  I  stand  upon  my  own 
bottom :  I  know  what  my  rights  are  and  I  know  what  my  interests  are,  and  I  act 
as  my  judgment  teaches  me :  I  am  not  bound  to  subordinate  my  views  to  my  fellow 
workman  and  have  him  dictate  when  I  shall  work  or  how  I  shall  work.  There  are 
two  sides  to  all  these  questions. 

Mr.  Maguire  :  As  we  Union  men  here  are  the  only  representatives  of  labour 
that  are  here  I  am  simply  giving  my  humble  opinion. 

The  Commissioner:  I  am  not  quarreling  with  your  opinion.  I  am  only 
pointing  out  there  are  two  sides. 

Mi;.  Whalen:  I  myself  have  served  on  a  jury  in  this  country  where  the 
Provincial  Police  selected  a  jury  with  regard  to  a  mining  accident,  and  the  result 
was  the  greater  part  of  the  jury,  when  it  came  to  explaining  the  circumstances  that 
led  to  the  accident,  didn't  know  anything  about  it  because  they  weren't  miners, 
and  they  brought  in  a  verdict  it  was  just  an  accident.  Now,  it  might  result  the 
very  same  in  this  ease  which  you  suggest,  so  you  would  have  to  use  pretty  good 
judgment  in  selecting  the  men. 

Mr.  Mahon  :     That  is  referring  to  a  coroner's  inquest,  no  doubt. 


1912  WOKK.MK.VS  COMPENSATION  COMMISSION.  195 

, __ — _, 

The  Commissioner:  I  am  not  suggesting  that  it  is  feasible  at  all.  I  am  only 
throwing  out  the  suggestion  to  see  what  you  think  of  it.  Something  is  desirable 
to  get  immediate  settlement  of  claims,  .and  preventing  the  wasting  of  money  in 
litigation,  and  letting  the  hungry  lawyer  get  it  instead  of  the  man  who  suffers. 
It  is  hard  to  devise  a  satisfactory  scheme. 

Mr.  Gorman  :  The  scheme  adopted  by  the  Carnegie  Steel  Company  seems  to 
be  a  very  fair  one,  both  to  the  men  and  to  the  managers  or  owners.  They  havp 
a  safety  committee  which  is  composed  of  men  chosen  by  the  men  themselves,  and 
the  officers  of  the  company.  I  don't  see  why  it  wouldn't  be  possible  to  go  a  little 
further  in  that,  not  only  for  the  prevention  of  accidents,  but  in  settlement  of 
claims,  by  having  the  manager  as  one  party  for  the  company,  and  a  chosen 
employee  who  is  chosen  by  the  men  themselves,  together  with  a  definite  appointeee, 
a  judge  of  a  Division  Court,  or  any  equitable  party,  and  those  three  men  get 
together  and  settle  the  case  off-hand,  but  I  think  that  the  Compensation  Act 
should  be  the  scale  on  which  it  was  based,  according  to  the  views  which  Mr.  Mahon 
has  expressed,  and  then  work  out  the  solution  of  the  employees  and  managers  with 
some  definite  appointee. 

The  Commissioner:  You  see  there  are  so  many  injuries  that  a  man  might 
sustain  that  are  not  easily  located.  It  is  difficult  perhaps  in  these  spinal  troubles 
to  tell  whether  a  man  is  really  suffering  as  he  thinks  he  is,  or  whether  it  is  some- 
thing else.  That  is  a  class  of  case  where  it  is  difficult  to  get  at  the  extent  of  the 
injury.  I  suppose  if  it  is  a  broken  leg  or  that  kind  of  thing  it  is  easy  enough  to 
form  a  judgment-     Perhaps  those  cases  are  not  so  frequent  in  a  mine. 

Mr.  Whalen  :  In  the  mining  industry  the  work  is  very  heavy  as  well  as 
hazardous,  and  a  man  that  can  go  and  lug  around  a  three  hundred-pound  machine 
or  swing  an  eight-pound  hammer  for  eight  or  ten  hours  has  very  little  the  matter 
with  him. 

Mr.  Kingswell  :  "Will  you  allow  me  to  make  an  explanation  with  regard  to 
what  Mr.  Maguire  said.  He  said  that  a  man  can  go  into  a  place  and  prove  another 
man  is  a  miner  when  he  isn't.  He  says  a  blacksmith  could  go  and  take  out  a  hole. 
Could  a  man  come  in  and  fool  a  man  who  knows  how  to  make  that  hole  and  how 
to  blow  it  out  to  the  best  advantage?  There  is  no  blacksmith  can  work  like  a 
miner.  Any  miner  in  this  room  knows  that.  I  want  to  impress  upon  you  the 
advisability  of  having  good  practical  men. 

The  Commissioner  :  I  have  heard  from  the  Union  men  and  the  mine  man- 
agers, and  some  who  are  not  Union  men,  and  now  I  would  like  to  hear  from  the 
only  independent  man,  the  man  who  does  not  work  at  all. 

Mr.  Kingswell  :     I  am  one  that  doesn't  work  at  all. 

Mr.  "Whalen  :  If  it  were  decided  to  grant  compensation  for  diseases  peculiar 
to  the  industry,  I  think  it  might  occasion  some  trouble  in  fixing  the  liability  on  the 
parties  responsible  for  that  disease.  If  a  man  wrorks  two  months  and  then  leaves 
and  works  somewhere  else  for  a  month,  how  are  you  to  tell? 

The  Commissioner  :  That  is  covered  by  one  of  the  acts,  and  they  divide  it 
up.  In  some  the  disease  is  progressive,  and  if  he  has  been  in  several  employments 
— I  am  now  speaking  with  certainty — they  apportion  it  between  the  different 
employers. 

Mr.  Maguire  :  I  would  like  to  call  this  very  important  fact  to  your  atten- 
tion, with  regard  to  drawing  lines  of  demarcation  as  to  what  would  be  right  and 
what  would  lie  wrong  and  where  one  thing  would  stop  and  another  commence. 
We  know  it  is  the  hardest  thing  in  all  science,  and  we  know  it  is  the  hardest  thing 
in  all  practical  life,  and  that  lines  of  demarcation  are  always  hard  to  draw;  but 


196  MINUTES  OF  EVIDENCE:  No.  05 


Governments  or  people  cannot  possibly  stop  progress  simply  over  a  difficulty  of 
drawing  lines  of  demarcation. 

The  Commissioner  :  If  there  is  anybody  else  wishes  to  speak  I  will  be  glad  to 
hear  him.  I  am  very  much  obliged  to  you  for  having  put  in  your  appearance  here, 
and  for  the  information  you  have  been  able  to  give  me.  It  has  been  all  taken 
down  so  that  not  only  I  will  have  the  benefit  of  it  in  performing  the  duty  which  I 
nave  been  commissioned  to  do,  but  the  House  and  the  country  will  have  the  benefit 
also,  because  it  will  no  doubt  be  printed.  The  ultimate  tribunal  are  the  people 
of  th^s  country  to  determine  all  these  matters,  and  they  will  have  it  before  them. 

The  only  thing  which  has  jarred  upon  me  to-day  at  all  is  the  statement  by 
one  gentleman  here  that  seems  to  indicate  that  he  believes  that  war  between  the 
employer  and  employee  is  a  natural  condition,  and  apparently  a  condition  that  he 
does  not  see  much  harm  in.    Now,  I  think  that  is  a  most  terrible  state  of  things. 

Mr.  Botly:  If  I  might  interrupt  you,  I  might  suggest  that  there  has  been 
war  carried  on  amongst  the  various  nations  of  the  world  for  untold  centuries,  and 
after  the  lapse  of  time  has  passed  we  have  seen  those  wars  have  actually  benefited 
the  human  race,  and  I  claim  that  this  war  is  in  the  same  position. 

The  Commissioner:  We  wouldn't  have  any  more  wars  just  for  the  purpose 
of  trying  the  experiment.  No  doubt  labour  has  had  a  great  deal  to  complain  of  in 
the  past,  and  perhaps  it  is  only  now  coming  to  its  own,  but  it  is  not  helping  itself 
on  by  proclaiming  war  against  the  rest  of  the  community.  It  is  all  wrong,  unsound 
and  dangerous. 

Mr.  Cohen  :  I  do  not  think  that  is  the  sentiment  of  the  workingmen  of  this 
camp.  In  our  own  mines,  speaking  of  it  because  I  am  more  familiar  with  it  than 
any  other,  I  have  174  men  on  the  average  pay  roll  that  were  employed  in  1910. 
"We  paid  a  bonus  to  the  men  who  worked  there  three  months  and  who  were  in  the 
employ  of  the  company  at  the  end  of  the  year,  and  we  paid  a  bonus  to  159.  In 
other  words  there  were  159  men  who  were  satisfied  to  stay,  and  that  is  under 
conditions  where  men  come  and  go.  Miners  are  restless  and  don't  stay  long  in 
one  place,  and  they  are  single  men.  Those  159  men  were  paid  bonus  cheques  and 
they  were  employed  over  three  months,  and  100  men  out  of  the  174  were  employed 
the  whole  twelve  months,  and  they  undoubtedly  were  satisfied  with  their  conditions 
or  they  wouldn't  have  done  so.  I  don't  think  there  is  any  such  feelino  in  the 
camp  at  all.  I  think  the  majority  of  the  men  are  satisfied,  but  there  are  a  few  men 
who  in  their  zeal — I  am  not  speaking  personally — or  in  their  desire  for  advance- 
ment, take  that  position.  We  do  not  want  you  to  go  away  with  the  opinion  that 
the  men  in  this  camp  are  dissatisfied.  I  have  been  a  workingman  myself.  I  have 
worked  in  mines  just  the  same  as  these  other  men  have,  and  I  know  the  working- 
man's  views.  I  don't  look  at  him  from  my  position  of  mine  manager;  and  I  know 
the  men  are  not  at  war  with  the  mine  managers.  They  have  nothing  but  a  friendly 
feeling,  and  the  feeling  is  reciprocated. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  197 


FOURTH  SITTING. 


Legislative  Building,  Toronto. 

Wednesday,  2Wi  December,  1911,  11  a.m. 

Present:     Sir  William  R.  Meredith,  Commissioner. 
Mr.  F.  N.  Kennin,  Secretary. 
Mr.  W.  B.  Wilkinson,  Law  Clerk. 

The  Commissioner  :  Have  you  something  to  bring  up  this  morning,  Mr. 
Bancroft? 

Mr.  Bancroft  :  Your  Lordship,  I  think  we  arc  ready  with  our  case.  Prob- 
ably you  are  aware  of  that,  but  I  will  go  over  it  and  perhaps  make  some  explana- 
tions, and  Ave  may  give  some  evidence  afterwards,  if  it  is  necessary.  I  will  read 
what  has  been  prepared,  which  has  been  put  in  the  way  of  recommendations.  It 
is  addressed  to  Sir  William  Meredith,  Commissioner  of  the  Provincial  Government, 
re.  Workmen's  Compensation  Legislation. 

"Sir, — Understanding  that  it  is  the  desire  of  this  Commission  to  make  recom- 
mendations for  a  Workmen's  Compensation  Act  in  harmony  with  modern  indus- 
trial conditions,  we  have  the  honour  to  submit  herewith  recommendations  for  a 
Workmen's  Compensation  Act  for  the  Province  of  Ontario.  These  recommenda- 
tions have  been  discussed,  and  unanimously  agreed  to  by  representatives  of  the 
Dominion  Trades  and  Labour  Congress,  Toronto  Central  Labour  Council,  the 
Building  Trades  Council  of  Toronto,  and  the  Metal  Trades  Council,  whose  signa- 
tures are  appended  hereto." 

This  represents  probably  in  the  neighborhood  of  150,000  in  the  Dominion 
Trades  and  Labour  Congress ;  18,000  to  20,000  in  the  Toronto  Central  Labour  Coun- 
cil; the  Building  Trades  Council,  I  believe,  represents  somewhere  in  the  neighbor- 
hood of  12,000,  and  the  Metal  Trades  in  Toronto  probably  5,000  or  6,000. 

"We  also  understand  that  it  is  the  expressed  desire  of  the  Commission  to 
report  to  the  next  session  of  His  Majesty's  Provincial  Legislature,  the  conclusions 
and  recommendations  for  legislation  of  this  Commission  on  this  subject.  We 
therefore  have  lost  no  time  in  taking  the  matter  up  to  suit  the  convenience  of  the 
Commission.  We  propose  to  give  plainly,  therefore,  the  fundamental  principles 
which  we  believe  should  be  the  basis  for  construction  of  a  new  Workmen's  Com- 
pensation Act  in  this  Province.  It  is  unnecessary  to  refer  to  the  present  legislation 
in  Ontario.  Its  uselessness  has  been  pointed  out  for  years  by  representatives  of 
labour,  its  obsoleteness,  indeed,  preventing  almost  any  one  from  even  an  attempt  to 
defend  it.  The  ancient  character  of  the  present  legislation  may  make  it  seem  to 
many  that  a  new  Act  in  harmony  with  modern  conditions,  with  modern  legisla- 
tion in  countries  that  have  made  serious  attempts  to  solve  the  question,  is  in  the 
nature  of  radical  legislation,  but  that  is  merely  because  the  matter  has  been  so  long 
neglected  in  Ontario. 

"  We  propose  that  the  new  Act  shall  cover : 

"1.  All  employments,  the  employees  of  the  Province,  municipality,  county,  or 
other  administrative  bodies  in  the  Province  to  be  covered  the  same  as  employees 
in  industries. 

"  2.  Compensation  for  all  injuries  arising  out  of,  and  in  the  course  of  employ- 
ment. 


198  MINUTES  OF  EVIDENCE:  No.  65 

"  3.  Compensation  for  being  disabled,  or  other  injuries  arising  out  of,  or  as 
the  result  of,  a  specified  occupation,  the  said  disablement  and  injuries  being  in  the 
nature  of  occupational  diseases. 

"  4.  Entire  cost  of  compensation  to  rest  upon  employers. 

' "  5.  In  the  case  of  injuries  resulting  in  death  the  dependants,  as  outlined  in 
the  British  Act,  and  State  of  Washington  Act,  shall  be  the  beneficiaries,  with  the 
expenses  of  the  funeral,  as  outlined,  also. 

"  6.  The  doctrine  of  negligence  on  the  part  of  the  employee  or  employer,  fel- 
low-servant, or  otherwise,  shall  have  no  place  in  the  new  legislation. 

"  7.  State  insurance  in  connection  with  Compensation  Act. 

"  8.  The  creation  of  a  Provincial  Department  of  Insurance  with  three  Com- 
missioners, for  the  purpose  of  administration  of  the  act. 

"  9.  Compulsory  insurance  of  employers  in  the  State  Department,  by  a  yearly 
tax  levied  upon  the  industry,  or  occupation,  covering  the  risk  of  the  particular 
industry  or  occupation. 

"  10.  The  tax  shall  be  upon  the  yearly  wage  roll. 

"11.  No  employer  shall  attempt  to  pay  the  tax  by  deduction  of  wages  of 
employee,  by  agreement  or  otherwise,  such  action  to  be  regarded  as  a  gross  mis- 
demeanour as  provided  for  in  the  State  of  Washington  Legislation. 

"  12.  The  schedules  of  payment  under  the  act,  to  be  based  upon  the  payments 
under  the  British  Act,  with  the  proportional  increases  due  to  the  difference  in  the 
wages  in  Ontario,  reflecting  the  difference  in  the  cost  of  living. 

"  13.  The  Provincial  Government  shall  provide  revenue  for  the  creation  of 
the  Department  of  Insurance. 

"  The  following  will  give  you  some  idea  of  the  weight  of  opinion  in  favour  of 
the  burden  being  borne  by  the  employer,  or  industry  alone : 

"  Great  Britain.  The  employers  alone  bear  the  burden,  and  they  insure  volun- 
tarily in  State,  mutual,  or  private  stock  companies. 

'Norway.     Employers  bear  the  burden  and   State  insurance  is  compulsory. 
'  Sweden.    Employers  bear  the  burden  and  insure  as  in  Great  Britain." 

That  is  voluntarily  in  State,  mutual  or  private  companies. 

The  Commissioner:     What  State  insurance  is  there  in  Great  Britain? 

Mi;.  Bancroft:     There  is  State  insurance  whereby  the  employer  can  insure. 

The  Commissioner:    When  was  that  created? 

Mr.  Bancroft  :  I  wouldn't  be  prepared  to  say  when  it  was  created,  but  it  is 
the  fact.  I  have  here  a  report  of  a  Commission  which  was  probably  one  of  the 
best  Commissions  that  ever  took  into  consideration  Workmen's  Compensation. 
In  the  summary  of  Workmen's  Insurance  in  Europe,  Prankel,  who  is  the  head  of 
the  industrial  side  of  the  Metropolitan  Life  Insurance  Company,  says  that  in 
Great  Britain  the  character  of  that  insurance  is  according  to  the  choice  of  employers 
in  State,  mutual,  or  private  stock  companies.  "  Frankel  and  Dawson  "  is  a  1910  pub- 
lication. It  also  goes  on  as  to  establishment  funds,  compulsion,  the  number  of  men 
covered,  etc.:  by  the  employers  alone  is  the  burden  borne.  It  is  all  here  for  your 
perusal. 

The  Commissioner:  T  think  that  is  a  mistake.  T  do  not  think  there  is  any 
State  insurance  in  Great  Britain. 

Mn.  Bancroft:  T  think  myself  that  in  Great  Britain  at  the  present  time  there 
is  a  means  of  (Jhe  employer  insuring  in  State  insurance.  Tn  fact  T  "think  it  would 
be  only  the  truth  to  say  so.  This  is  the  most  complete  report  of  any  Commission 
thai  has  gone  to  Europe,  in  my  estimation.  Tt  is  on  the  Russell  Sage  Foundation, 
and  is  one  of  the  best  reports  that  has  ever  been  made.    I  know  the  British  Trades 


« 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  199 


-i 


Congress  arc  asking  for  State  insurance,  and  they  are  asking  for  compulsory 
insurance.  They  are  not  merely  asking  for  State  insurance,  but  compulsory  State 
insurance,  so  that  if  State  insurance  isjaossible  at  the  present  time,  it  seems  to  be 
the  fact  that  the  employers  do  not  take  advantage  of  it,  and  the  labourers  want  to 
make  it  compulsory. 

"Then  in   Holland  employers  bear  the  burden  by  compulsory   insurance    in 
State,  mutual  or  private  organizations. 

"Denmark.     Employers  bear  the  burden  and  insure  as  in  (ireat  Britain,  but 
insurance  is  compulsory. 

"Belgium.     Employers  bear  the  burden  by  voluntary  insurance  as  in  Great 
Britain. 

"  France.  Employers  bear  the  .burden  by  voluntary  insurance  as  in  Great 
Britain. 

"  Italy.  Employers  bear  the  cost  by  compulsory  insurance,  but  insure  in  State, 
mutual  or  otherwise  as  in  Great  Britain. 

"Germany.  Employers  bear  the  cost  of  workmen's  compensation.  Insurance 
is  compulsory  in  State,  mutual  trade  associations,  and  State  Executive  Boards. 

"  Wage  earners  covered  by  such  compensation : 

Great   Britain    13,000,000 

Norway    " 400,000 

Sweden      1,000,000 

Holland 1,000,000 

Belgium        2,100,000 

France     9,500,000 

Italy     10,000,000 

Germany     15,000,000 

Total      52,000,000 

"  Fifty-two  million  workers  covered  by  compensation  legislation,  in  which  the 
whole  burden  is  on  the  employer  or  industry. 

"There  are  those  who  confuse  the  contributory  schemes  of  such  insurance, 
invalidity  and  old  age,  with  compensation  legislation,  but  this  Commission  is  not 
dealing  with  social  insurance,  only  so  far  as  it  affects  compensation  for  accidents, 
fatal  or  otherwise,  arising  out  of  or  in  the  course  of  employment,  and  we  therefore 
deal  with  it  as  such. 

"  The  doctrine  of  contributory  negligence  was  the  always  fruitful  source  of 
litigation,  and  as  the  position  'that  the  worker  would  injure  himself  to  obtain 
compensation '  has  become  untenable,  as  well  as  the  fact  that  if  a  workman  takes 
risks  it  is  generally  because  in  the  nature  of  his  employment  conditions  make  him 
do  so,  this  doctrine  has  almost  wholly  passed  away.  It  exists  mostly  in  old  legis- 
lation on  the  matter. 

"  The  tendency  of  thought  in  Europe  as  well  as  North  America  is  toward 
compulsory  State  insurance." 

The  Commissioner:  This  contributory  negligence  in  the  ordinary  sense  is 
done  away  with  in  England,  but  they  retain  the  provision  where  a  workman  is 
injured  "  owing  to  serious  and  wilful  misconduct." 

Mr.  Bancroft:    Yes,  gross  misconduct. 

The  Commissioner:     "Serious  and  wilful  misconduct"  is  the  wording. 


200  MINUTES  OF  EVIDENCE :  No.  65 

*  '  —  ■ 

Mr.  Bancroft  :  Except  where  it  is  fatal.  The  great  source  of  litigation  was 
the  contributory  negligence  clause,  which  allowed  the  employer  to  show  in  the 
slightest  accident  that  the  workman  had  contributed  in  some  manner  or  other  to 
the  accident. 

The  Commissioner  :  That  is  gone,  of  course,  under  the  British  law. 

Mr.  Bancroft:  I  think  the  British  law  was  built  somewhat  on  other  Euro- 
pean legislation.  Germany  had  three  different  acts.  First  they  had  a  sickness  and 
death  insurance  legislation,  and  then  they  had  legislation  which  covered  invalidity 
and  old  age,  and  the  Workmen's  Compensation  Act  was  the  completing  of  the 
social  insurance  of  Germany;  and  of  course  the  first  step  in  social  insurance  in 
Great  Britain  was  Workmen's  Compensation,  and  naturally  she  took  probably  one 
or  two  ideas  from  Germany,  but  finally  she  had  to  make  almost  a  completely  new 
piece  of  legislation,  because  insurance  for  sickness,  invalidity  and  old  age  has  got  to 
follow  workmen's  compensation  in  England.  Where  Germany  started  out  Great 
Britain  has  got  to  end.    It  is  just  vice  versa  in  those  two  countries. 

"The  British  Act,  an  admirable  one,  is  found  to  be  in  need  of  improvement  in 
this  direction,  as  the  British  Trades  Congress,  the  mouthpiece  of  organized  labour, 
is  seeking  to  have  established  compulsory  State  insurance  in  connection  with  the 
act.  The  Manitoba  Act,  modelled  upon  British  legislation,  is  found  to  be  Wanting 
improvement  in  this  direction  also,  as  the  Central  Labour  Council  in  Winnipeg  has 
expressed  itself  a  short  time  ago  as  intending  to  seek  compulsory  State  insurance 
in  connection  with  the  legislation.  The  splendid  legislation  of  the  State  of  Wash- 
ington, recently  placed  in  operation  with  a  State  Department  of  Insurance,  and  a 
declaration  of  police  power,  is  worthy  of  your  most  serious  attention,  from  which  we 
quote  the  following : 

"  The  common  law  system  governing  the  remedy  of  workmen  against  employ- 
ers for  injuries  received  in  hazardous  work,  is  inconsistent  with  modern  industrial 
conditions.     In  practice  it  proves  to  be  economically  unwise  and  unfair. 

"  It's  administration  has  produced  the  result  that  little  of  the  cost  to  the 
employer  has  reached  the  workman  and  that  little  only  at  large  expense  to  the 
public. 

"  The  remedy  of  the  workman  has  been  uncertain,  slow  and  inadequate. 

"  Injuries  in  such  works,  formerly  occasional,  have  become  frequent  and 
inevitable." 

I  want  to  draw  your  attention  to  that  last  clause  particularly:  "Injuries  in 
such  works,  formerly  occasional,  have  become  frequent  and  inevitable."  That  is 
under  the  common  law  system. 

The  Commissioner  :    What  does  that  mean  ? 

Mr.  Bancroft:  It  means  this,  that  under  the  present  legislation  that  we 
have  in  Ontario  it  is  not  expensive  enough.  An  accident  is  not  expensive  enough 
to  an  employer  to  induce  him  to  prevent  it.  The  only  way  to  stop  accidents  in 
industry  is  to  make  it  too  expensive  for  them  to  have  them.  You  can't  blame  the 
employer.  You  can  from  a  moral  standpoint,  but  not  from  a  business  standpoint. 
He  is  running  the  business  at  the  lowest  cost  of  production,  and  unless  it  is  made 
expensive,  which  legislation  generally  has  to  do,  the  employer  doesn't  make  it  his 
business  to  prevent  those  accidents. 

The  COMMISSIONER:     What  do  you  mean  "by  making  it  expensive? 

Mi;.  Bancroft:    By  the  compensation. 

The  Commissioner:  That  is  the  state  of  the  present  act. 

Mr.  Bancroft:  Here  is  tbe  evidence  under  the  common  law:  "Injuries 
in  such  works,  formerly  occasional,  have  become  frequent  and  inevitable."  That 
is  wlmi  experience  has  proved. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  201 

The  Commissioner:    AY  hat  is  the  authority  for  that  statement? 

Mr.  Bancroft:  I  suppose  the  authority  of  the  people  who  drew  that  act  of 
the  State  of  Washington.  I  have  three"  volumes  of  the  evidence  taken  before  the 
Commission. 

Tin:  Commissioner:    You  are  reading  from  the  preamble? 

Mr.  Bancroft:    Yes. 

"The  welfare  of  the  State  depends  upon  the  industries  and  even  more  upon 
the  welfare  of  its  wage  worker. 

••  The  State  of  Washington,  therefore,  exercising  herein  its  police  and  sov- 
ereign power,  declares  that  all  phases  of  the  premises  are  withdrawn  from  private 
controversy,  and  sure  and  certain  relief  for  workmen,  injured  in  extra  hazardous 
work,  and  their  families  and  dependants,  is  hereby  provided,  regardless  of  questions 
of  fault,  and  to  the  exclusion  of  every  other  remedy,  proceeding  or  compensation, 
except  as  otherwise  provided  in  this  act;  and  to  that  end  all  civil  actions  and  civil 
causes  of  actions  for  such  personal  injuries  and  all  jurisdiction  of  the  courts  of 
the  State  o\er  such  eases  are  hereby  abolished  except  as  in  this  act  provided.** 

The  Commissioner:  Does  that  mean  that  these  organizations  which  you 
represent  are  in  favor  of  substituting  whatever  compensation  is  provided  for  for  any 
other  remedy  which  the  workmen  might  have  at  common  law?  That  is  what 
the  Washington  Act  does. 

Mi?.  Bancroft  :    Not  completely,  sir. 

The  Commissioner:  Practically  so.  There  is  only  a  very  limited  case.  It 
leaves  the  one  case  if  death  results  from  the  deliberate  negligence  of  the  employer. 
Then  they  also  have  an  action  at  common  law. 

Mr.  Bancroft:     Sure. 

The  Commissioner  :  But  apart  from  that  as  I  understand  it  the  Act  takes 
the  place  of  any  common  law  liability. 

Mr.  Bancroft  :  Yes.  Well,  if  we  could  be  guaranteed  a  AYorkmen's  Compen- 
sation Act  so  wide  in  its  provision  as  the  State  of  Washington  I  don't  see  that  the 
workers  of  this  country  would  have  any  objection  to  the  jurisdiction  of  the  court 
as  far  as  injuries  are  concerned — injuries  arising  out  of  employment.  It  should 
be  given  to  a  tribunal  such  as  three  commissioners  in  a  provincial  Government  like 
this,  because  they  are  practically  constituting  another  court. 

The  Commissioner  :  I  do  not  think  you  have  comprehended  my  point.  There 
may  be  as  the  result  of  an  injury  a  liability  of  the  employer  at  common  law.  Now, 
the  State  of  Washington  Act  with  the  one  limited  exception  that  I  mentioned  takes 
away  that  common  law  right,  and  substitutes  for  it  the  provisions  of  their  law. 

Mr.  Bancroft:    Yes. 

The  Commissioner  :  I  would  like  to  understand  whether  your  body  have  con- 
sidered that  aspeet.  and  whether  they  favour  it? 

Mr.  Bancroft:  Yes,  I  think  we  are  thoroughly  in  favour  of  that  providing 
that  we  also  have  the  provision  or  loop  hole  that  is  left  in  the  State  of  Washington 
Act,  which,  in  my  opinion,  is  intended  for  the  specific  purpose  of  allowing  a  man, 
if  he  does  not  get  thorough  justice  under  the  State  of  Washington  legislation,  to 
still  have  the  courts,  jnst  as  the  British  Act,  because  the  State  of  Washington  act 
was  undoubtedly  modelled  on  the  British  Act,  with  the  addition  of  State  insurance. 
We  would  like  the  same  rights  as  in  the  State  of  Washington  and  the  British  Act, 
if  justice  is  not  done. 

The  Commissioner:    That  is  an  appeal  from  this  Board  you  speak  of? 

Mr.  Bancroft:    Exactly. 


202  MINUTES  OF  EVIDENCE:  No.  65 

Surely^,  Sir,  this  must  commend  itself  as  a  guide  for  administration  of  com- 
pensation, without .  litigation,  such  as  anyone  having  at  heart  the  welfare  of  the 
workers  might  follow. 

Perhaps  the  best  feature  of  the  Washington  legislation  is  the  fact,  that  it  makes 
for  the  prevention  of  accidents,  which  we  regard  as  more  important  than  compen- 
sation. The  taxing  of  industries  according  to  their  respective  risks,  is  an  incentive 
to  the  employers  to  reduce  the  risks,  which  means  a  reduction  of  the  yearly  pre- 
mium. 

It  is  only  by  making  risks  expensive  in  industry  to  employers  that  Ave  can  hope 
to  reduce  them  to  a  minimum. 

Contracting  out  clauses,  sub-contractors'  liabilities,  all  the  aggravating  ques- 
tions of  controversy  and  litigation,  could  be  obviated  by  provincial  compulsory  in- 
surance, with  a  department  of  administration,  in  connection  with  which  the  Pro- 
vincial Health  Department  could,  on  investigation  among  the  workers  of  Ontario, 
tabulate,  what  are  occupational  diseases  in  our  own  Province. 

It  is  possible  that  in  our  Province  we  have  not  the  occupational  diseases  that 
they  have  in  other  parts  of  the  world,  but  it  is  also  possible  that  we  have  occupa- 
tional diseases  in  this  Province  that  they  have  not  in  other  parts  of  the  world,  and 
it  would  be  necessary  probably  for  the  Provincial  Health  Department  to  find  that 
out.    I  think  they  could  get  all  the  evidence  that  was  necessary. 

"We  believe  that  an  Act  modelled  upon  the  British  Act  in  principle,  with  the 
compulsory  State  insurance  of  the  Washington  Act,  with  its  police  administra- 
tion, and  tax  upon  industry,  as  a  preventive  for  accidents,  would  be  the  best  for  the 
workers  as  well  as  for  the  employers. 

With  regard  to  the  sums  of  compensation  in  the  schedules,  we  will  be  willing 
if  you  decide  on  the  British  Act  altogether,  to  work  out  the  payments  for  Ontario, 
taking  into  consideration  the  different  financial  proportions  of  wages  and  cost  of 
living. 

The  British  Act  is  founded  upon  the  principle  that  the  workers  that  are  cov- 
ered get  below  £250  a  year,  or  $1,250.  That  would  be  too  low  in  Ontario, 
because  the  same  class  of  workers  in  Ontario  would  not  be  covered  probably  unless 
a  sum  of  $2,000  was  stated.  There  are  probably  many  mechanics  to-day  who  are 
getting  very  near  that  mark,  and  over. 

The  Commissioner  :  Our  present  law  is  $1,500,  or  three  years  wages  in  the 
trade,  whichever  is  the  larger. 

Mr.  Bancroft:  In  speaking  about  that  you  must  remember  in  the  British 
Act  they  have  covered  them  in  a  different  manner  than  the  present  act  in  Ontario. 

The  Commissioner  :    No  doubt. 

Mi:.  Bancroft:     "We  would  say,  however,  that  if  you  follow  the  British  Act 
mpletely,  it  should  cover  all  workers  in  Ontario  getting  less  than  $2,000   a  year. 
endeavour  to  prove  to  you  that  some  of  the  payments  made  by  the  month  are  too 
low. 

"Anything  less  than  either  of  these  two  Act?  will  be  inadequate  to  meet  the 
needs  of  the  workers  of  Ontario,  and  as  this  Province  is  the  manufacturing  centre 
of  our  Dominion,  we  claim  that  the  legislation  that  should  be  adopted,  and  which 
we  desire,  is  that  pointed  out  by  the  fundamental  principles  we  have  laid  down  for 
your  consideration. 

"Any  further  evidence  you  may  need  we  will  be  only  too  pleased  to  procure, 
and  we  ask  you  to  request  our  co-operation  for  this  purpose  at  any  time." 

This  is  signed  by  all  the  representatives  of  the  different  organizations  which 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  .203 

have  met  and  discussed  the  question.  It  is  signed  by  myself  as  Vice-President  of 
the  Trades  and  Labour  Congress,  with  Joseph  Gibbons  and  J.  W.  Doggett;  for  the 
Toronto  District  Trades  and  Labour  Council  by  Frank  McCann,  President,  and 
Henry  R.  Barton,  Secretary;  for  the  Melal  Trades  Council,  by  James  H.  Ballantyne 
and  Joseph  Hellicker;  for  the  Building  Trades  Council  by  William  Nettleship, 
President;  by  Andrew  Miller  for  the  Brotherhood  of  Carpenters;  and  by  the  joint 
executive  Board  of  the  Carpenters'  Organizations,  H.  A.  Ryder,  Gerald  Baines, 
A.  J.  Udall,  and  George  Thomson. 

That  is  a  statement  of  the  principles  upon  which  we  believe,  your  Lordship, 
a  modern  Workmen's  Compensation  Act  should  be  built.  In  support  of  our  state- 
ment we  have  the  proofs  ready  and  will  give  them  to  anyone,  or  answer  any  ques- 
tions that  anybody  may  wish  to  ask  on  the  matter.  I  may  saj-  i  think  myself,  and 
I  think  organized  labour  thinks  all  over  this  country,  that  State  insurance  is  the 
real  principle  for  making  a  Workmen's  Compensation  Act  efficient.  The  question 
then  arises  as  to  whether  State  insurance  should  be  compulsory.  In  countries  where 
they  have  State  insurance  it  looks  as  if  it  had  been  found  necessary  to  make  it  com- 
pulsory before  it  was  efficient.  Probably  the  word  "  compulsory  "  is  not  one  that 
the  employers  will  like  very  much,  but  all  things  more  or  less  in  legislation  are 
compulsory.  I  will  not  read  any  more  or  give  any  more  of  the  evidence,  but  it  is 
all  here,  and  anything  you  wish  to  ask,  or  anything  the  manufacturers  wish  to  ask,  I 
will  be  ready  to  answer  any  questions. 

The  Commissioxek:  What  do  you  say  as  to  this  argument  that  is  -used 
against  the  Washington  system,  as  to  the  stated  percentage  of  the  wage  bill,  which 
represents  the  tax  upon  the  particular  industry? — Take  the  printing  industry,  for 
example. — It  is  said  now  that  that  tax  being  levied  equally  upon  all,  the  man  who 
is  careful  of  his  workmen  and  up-to-date  in  his  appliances  to  prevent  accidents,  has 
to  pay  for  the  careless  man  who  is  on  the  same  footing  with  him  and  pays  no  more 
and  does  nothing  to  prevent  accidents? 

Mr.  Bancroft  :  It  is  not  a  good  argument,  your  Lordship,  for  this  reason, 
that  the  State  of  Washington  Act  provided  a  penalty  for  the  careless  employer  as 
well  as  the  careless  workman. 

The  Commissioner:    Does  it? 

Mr.  Bancroft  :  Ten  per  cent.  He  has  to  pay  a  certain  sum  into  the  treasury 
when  he  is  convicted  of  carelessness. 

The  Commissioner  :  That  is  a  particular  carelessness,  not  the  ordinary  care- 
lessness, that  is  a  breach  of  some  State  law. 

Mr.  Bancroft  :  No,  I  think  you  will  find  it  is  where  he  is  convicted  of  care- 
lessness. 

The  Commissioner:  The  British  Act  provides  one  method  of  determining 
the  amount  of  compensation,  and  refers  to  a  joint  committee  composed  of  repre- 
sentatives of  the  employers  in  a  particular  trade,  and  the  workmen  in  that  trade. 
Is  there  anything  like  that  in  this  country,  or  is  there  anything  like  that  presented? 

Mi;.  Bancroft:  Well,  as  far  as  the  British  Act  is  concerned,  your  Lordship, 
I  think  the  first  step  that  has  to  be  taken  in  the  matter  of  compensation  is  a  con- 
ference between  the  representatives  of  the  injured  party  and  the  employer,  and  if 
they  can't  agree  then  it  is  submitted  to  arbitration. 

The  Commissioner:  If  they  have  such  a  committee  it  may  go  first  to  the 
committee.     Have  you  got  any  such  thing? 

Mr.  Bancroft:     No,  there  is  no  permanent  committee  under  the  British  Act. 

The  Commissioner  :  Hndouhtedly,  but  I  am  asking  whether  you  have  any 
such  committee? 


204  MINUTES  OF  EVIDENCE :  No.  65 

Me.  Bancroft:    In  Canada?    No. 

The  Commissioner  :    Would  there  be  any  difficulty  in  providing  for  that  ? 

Mr.  Bancroft  :  I  don't  know,  but  I  would  like  to  read  this  to  your  Lordship. 
In  Great  Britain  the  settlement  of  disputes  is  (a)  by  a  Committee  of  the  em- 
ployers and  the  workmen. 

The  Commissioner:  That  is  the  Joint  Committee? 

Mr-  Bancroft:  Yes,  but  it  is  not  a  permanent  one.  (&)  By  arbitrators 
selected  by  both  parties,  and  if  the  employer  and  the  injured  party  cannot  agree 
then  they  submit  it  to  arbitration.  The  arbitrators  are  selected  and  they  choose 
a  third;  if  they  can't  agree  or  it  is  not  satisfactory  to  the  parties  it  is  settled  by 
a  judge  of  the  County  Court;  that  is,  a  third  man,  and  he  generally  settles  it. 

The  Commissioner:  Where  are  you  reading  from,  because  I  don't  find  that 
in  the  British  Act,  about  the  third  method  of  arbitration?  The  only  arbitration 
provided  for  is  that  it  is  determined  by  the  judge  of  the  County  Court  sitting  as 
arbitrator,  or  somebody  appointed  by  the  judge  with  the  sanction  of  the  Lord 
Chancellor.     That  Joint  Committee  is  a  kind  of  Board  of  Arbitrators. 

Mr.  Bancroft:  If  the  Joint  Committee  can't  agree  they  appoint  an  arbitra- 
tor each. 

The  Commissioner:  Where  the  Joint  Committees  of  employers  and  work- 
men exist  for  the  purpose  they  shall  settle  the  compensation  to  be  paid  and  other 
matters  relating  thereto,  including  costs,  unless  either  party  objects  in  writing. 
If  they  fail  to  act  within  six  months  the  matter  has  to  be  dealt  with  by  the  County 
Court  judge. 

Mr.  Bancroft  :  That  is  true,  but  what  I  mean  is  first  of  all  the  employer  and 
employee  get  together,  and  then  it  is  submitted  to  arbitration,  and  then  to  the 
County  Court  judge. 

The  Commissioner:  Of  course  they  can  submit  it  to  private  arbitration,  but 
the  Act  makes  no  provision  for  submitting  it  to  private  arbitration. 

Mr.  Bancroft  :  There  are  three  kinds  of  arbitration  under  the  act. 

The  Commissioner  :  I  don't  find  it. 

Mr.  Bancroft  :  There  is  an  explanation  of  it  by  one  of  the  foremost  bar- 
risters in  the  country,  Mr.  Emery. 

The  Commissioner:  Of  course  there  is  nothing  to  prevent  an  arbitration 
between  A  and  B,  whether  workmen  or  not.  but  there  is  no  provision  in  the  Act. 
That  is  all  I  am  speaking  of. 

What,  if  anything,  do  these  labour  organizations  do  for  the  wounded  mem- 
bers of  the  Order?  If  they  meet  with  an  accident  in  the  course  of  their  em- 
ployment do  they  do  anything  for  them?  Is  there  any  provision  for  helping 
them  ? 

Mr.  Meredith  :  In  our  Brotherhood  if  they  lose  a  hand  or  foot  they  are  en- 
titled to  insurance,  the  same  as  though  they  were  killed  outright. 

The  Commissioner:  That  moans  that  if  what  is  proposed  is  made  a  law  a 
man  is  paid  twice  over  for  the  same  injury,  does  it  not? 

Mi;.  Doggett:  I  might  explain  that  point  you  have  just  referred  to,  your 
Lordship.  I  belong  to  an  organization  that  is  all  over  the  English-speaking 
world,  the  Amalgamated  Carpenters  and  Joiners,  and  in  countries  where  there 
is  legislation  along  these  lines  that  we  arc  now  discussing  there  are  certain  pro- 
visions made  in  onr  constitution  whereby  one  of  our  members  receiving  compen- 
tion  through  the  Slate  it  is  less  considerably  than  what  lie  gets  in  Canada, 
where  we  have  no  legislation  along  those  lines. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  205 


Tile  Commissioner:  If  you  had  legislation  giving  full  compensation  to 
the  workmen  for  the  consequences  of  an  accident,  what  would  your  organization 
do,  so  far  as  paying  him  the  insurance  is  concerned? 

Mr.  Doggett:  Under  our  Constitution,  your  Lordship,  the  Amalgamated 
Society  of  Carpenters  and  Joiners,  if  the  injured  member  of  our  organiztaion 
receives  compensation  through  the  State,  or  compensation  through  the  courts,  he 
receives  half  of  what  he  does  in  another  part  of  the  world  where  he  receives  no 
compensation  through  the  State. 

The  Commissioner:  Is  that  fair.  Mr.  Doggett?  Supposing  the  man  has 
got  full  compensation  from  the  employer,  why  should  he  get  anything  from  his 
fellow  employees  ? 

.Mi;.  1 5 \ ycroft :  Would  you  say,  your  Lordship,  if  a  man  was  paying  on  a 
policy  of  insurance  for  a  number  of  years,  and  something  happened  where  he  got 
compensation,  that  it  would  be  unfair  for  him  to  draw  the  insurance  for  which  lie 
had  paid  so  long? 

The  Commissioner:  I  should  think  it  would.  If  the  injury  is  covered  by 
what  he  gets  from  the  State  surely  it  is  all  wrong  that  he  should  get  more. 

Mr.  Bancroft:  In  no  case  in  the  world  does  a  workman  get  full  compen- 
sation. 

Mr.  Doggett  :  I  would  like  to  point  out,  your  Lordship,  a  man  receiving 
compensation  from  our  organization  pays  for  that  before  he  receives  it,  and  also 
if  we  obtain  in  this  Province  a  Compensation  Act  with  State  insurance,  if  the 
compensation  is  charged  up  to  the  different  industries,  or  the  liability  is  charged 
up  to  the  different  industries,  we  as  consumers  will  also  again  pay  him. 

Mr.  Gibbons  :  We  have  found  it  necessary  to  have  insurance  for  the  reason 
that  there  has  been  no  compensation  up  to  date. 

The  Commissioner:     I  can't  understand  that. 

Mr.  Gibbons:  And  possibly  if  we  get  a  Compensation  Act  we  will  then  mould 
our  organization  to  fit  in  with  the  act.  Up  to  the  present  it  has  been  a  matter  of 
us  looking  after  the  injured,  or  the  widow,  or  the  orphan,  and  we  found  it  neces- 
sary, or  our  organization  found  it  necessary,  to  raise  the  amount.  We  only  paid 
$100  funeral  expenses,  but  we  found  it  necessary  to  raise  that  to  $800,  to  pro- 
vide something  for  the  widow  and  orphan.  I  have  gone  into  a  house  after  death 
and  I  have  found  that  there  wasn't  another  dollar  between  that  woman  and  the 
family  and  starvation  but  that  $100.  Now,  of  course,  a  great  many  members 
may  die  without  being  injured,  and  therefore  we  pay  the  same  in  the  case  of 
death  in  any  event.  It  is  not  an  accident  insurance,  it  is  an  insurance  in  case 
of  death. 

Mr.  Miller:  In  the  Brotherhood  of  Carpenters  I  may  say  we  pay  $200  at 
death,  and  also  for  disablement  $400.  That  of  course  is  covered  by  the  dues 
which  we  get  in,  and,  as  Mr.  Gibbons  has  said,  up  till  now  we  have  had  nothing 
to  take  its  place.  I  have  no  doubt  the  organization  will  have  to  remodel  their 
payments  and  benefits. 

The  Commissioner  :  They  could  give  more  for  sickness  and  things  of  that 
kind. 

Mr.  Miller:  Yes.    All  the  organizations  don't  even  have  sick  benefits. 

Mr.  Bancroft:  Besides,  Mr.  Emery,  the  barrister,  there  was  Philip  Snow- 
don . 

The  Commissioner:     He  is  pretty  wild. 

Mr.  Bancroft:   In  this  case  he  savs  there  are  three  kinds  of  arbitration. 


206  MINUTES  OF  EVIDENCE:  No.  65 

One  of  these  gentlemen  is  a  barrister,  and  they  are  never  wild.  There  are  two 
by  agreement  and  the  third  by  proceedings  in  the  County  Court.  Then,  Philip 
Snowdon  says,  there  are  three  methods  of  arbitration  under  this  Act,  two  under 
agreement  by  the  parties,  and  the  third  by  the  County  Court  judge.  This  is  the 
result  of  a  Commission  according  to  the  Eussell  Sage  basis,  (a)  by  agreement, 
(&)  by  arbitration,  (c)  by  a  judge  of  the  County  Court  if  the  parties  can't 
agree.     That  is  the  interpretation  of  the  British  Act. 

The  Commissioner:  Your  argument  is  that  the  exception  in  the  British 
Act  as  to  contributory  negligence  should  be  done  away  with?  Supposing  a 
motorman,  for  instance,  deliberately  disobeys  the  rules  of  his  employers  and  as 
a  result  kills  a  dozen  of  the  passengers,  and  he  himself  breaks  his  leg.  Do  you 
argue  that  the  public  would  stand  for  making  the  employer  pay  that  man  com- 
pensation ? 

Me.  Gibbons  :  We  find  in  those  cases  where  the  company  makes  rules,  they 
make  other  conditions  that  render  it  impossible  for  the  men  to  carry  out  the 
rules. 

The  Commissioner  :  That  cannot  be  general. 

Me.  Gibbons:  I  have  no  doubt  your  Lordship  is  referring  to  an  accident 
which  happened  the  other  day.  Now,  it  has  been  heralded  broadcast  that  there 
was  a  notice  for  a  stop,  and  there  was  no  notice  there  for  a  full  stop. 

The  Commissioner  :  I  am  putting  the  case  where  a  man  deliberately  goes 
past  a  signal  that  he  knows  means  stop,  and  kills  a  dozen  people,  and  breaks  his 
own  arm  and  leg.  Would  it  not  shock  the  public's  conscience  if  that  man  could 
compel  his  employers  to  pay  him  compensation? 

Mr.  Bruce  :  Doesn't  that  come  under  the  common  law,  if  a  man  is  convicted 
of  manslaughter? 

The  Commissioner:  He  would  be  paid  compensation  according  to  the  pro- 
posed act,  Mr.  Bancroft? 

Mr.  Bancroft:  Not  if  we  model  it  under  the  British  Act. 

The  Commissioner:  No,  but  you  are  objecting  to  that.  You  want  all  con- 
tributory negligence  of  every  kind  done  away  with. 

Mr.  Gibbons  :  We  find  in  a  case  of  this  kind  that  the  company  puts  up 
orders  for  certain  stops,  and  if  a  man  obeys  that  order  and  runs  behind  time 
the  chances  are  that  he  is  in  more  danger  of  an  accident  than  by  passing  on,  and 
if  he  obeys  that  order  and  gets  behind  time  the  company  has  no  use  for  him. 

The  Commissioner:  I  suppose  there  is  no  doubt  about  that,  Mr.  Gibbons, 
that  there  are  rules  that  are  made  not  to  be  observed? 

Mr.  Bancroft:  Now,  your  Lordship,  do  yon  think  that  is  a  fair  argument 
against  Workmen's  Compensation,  that  if  a  man  deliberately  and  criminally  did 
something  for  which  the  public  wouldn't  stand  he  would  be  paid  compensation? 
I  am  not  very  old,  but  I  don't  remember  yet  of  a  case  where  it  has  happened. 
Does  your  Lordship  remember  a  specific  instance?  If  there  is  a  specific  instance 
it  is  not  an  argument  against  compensation. 

The  Commissioner:  There  are  dozens  of  cases  happening  where  men  de- 
liberately disobey  signals. 

Mi:.  Bancroft:  With  criminal  intent? 

The  Commissioner:  T  don't  care  whether  you  call  it  criminal  or  not.  They 
have  done  it  with  their  eyes  open. 

Mr.  Bancroft:  There  may  be  motives  behind  that  we  cannot  discover. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  207 

The  Commissioner  :  Do  you  rn^an  to  argue  if  a  locomotive  engineer,  seeing 
a,  semaphore  against  him,  deliberately  goes  by  and  comes  into  collision  with 
another  train,  that  that  man  has  any  claim  morally  or  otherwise  for  compensa- 
tion if  he  is  injured? 

Mr.   Bancroft:  I  don't  see,  your  Lordship,    where    that    is    an    argument 
against  contributory   negligence. 

The  Commission  Kit:  I  am  not  talking  about  that.  Nobody  questions  now 
that  ordinary  contributory  negligence  ought  not  to  disentitle  a  person.  That 
seems  to  be  generally  conceded.  The  question  is  whether  where  a  man  is  guilty 
of  serious  and  wilful  misconduct  which  leads  to  accident,  whether  he  would  be 
entitled  to  compensation. 

Mr.  Bancroft  :  If  you  will  read  our  statement  we  have  asked  for  a  Bill  that 
shall  not  be  less  than  the  British  Act  or  the  State  of  Washington  Act.  We  have 
asked  for  the  abolition  of  contributory  negligence.  We  haven't  heard  stated  a 
specific  instance  of  a  locomotive  engineer  criminally  doing  something.  We  have 
asked  on  general  principles  for  the  abolition  of  contributory  negligence  as  we  - 
understand  it,  and  not  from  specific  negligence  such  as  the  locomotive  engineer 
doing  something  that  is  criminally  negligent.  There  could  be  a  clause  put  in 
where  a  man  has  criminally  disobeyed  orders  that  he  should  not  receive  com- 
pensation. 

The  Commissioner:  I  do  not  see  very  much  objection  to  the  words  in  the 
British  Act,  if  the  words  "  wholly "  is  put  there,  "  Where  the  accident  occurs 
wholly  from  the  serious  and  wilful  misconduct  of  the  employee," — where  it  is  due 
wholly  to  that  cause.  Then,  as  one  of  the  gentlemen  pointed  out,  where  death  en- 
sued that  exception  does  not  apply. 

Mr.  Bancroft:  Well,  I  don't  think  the  workers  of  this  country  would  have 
any  objection  to  that  part  of  the  British  Compensation  Act,  the  way  it  is  worded, 
provided  the  administration  of  it  is  the  same  as  in  Great  Britain,  but  we  have 
found  this,  that  the  conditions  in  this  country  are  so  different  and  so  far  behind 
Great  Britain. 

The  Commissioner:  Do  you  mean  to  say  industrial  conditions  in  this 
country  are  behind  Great  Britain? 

Mr.  Bancroft:  No,  conditions  as  far  as  legislation  is  concerned,  I  should 
say.     They  are,  or  we  wouldn't  be  here  to-day. 

Mr.  Miller:  There  was  a  case  in  Great  Britain  of  contributory  negligence, 
where  a  man  met  with  an  accident  who  was  under  the  influence  of  drink,  and 
that  is  generally,  or  almost  invariably  understood  among  the  workers  to  be  the 
only  bar  to  a  man  getting  compensation.  Now,  that  ease  was  tried  out  in  the 
courts,  and  the  man  won  out  for  this  reason,  ^that  the  superintendent  allowed 
him  to  go  to  work  in  that  condition. 

The  Commissioner  :  There  may  be  exceptional  cases. 

Mr.  Miller  :  That  is  one.  It  was  said  where  the  superintendent  allowed 
him  to  go  to  work  they  didn't  have  complete  supervision  over  their  plant  that 
was  necessary,  as  the  law  thought,  in  that  case. 

The  Commissioner  :  Now,  one  of  these  things  that  has  created  trouble  under 
the  British  Act  is  where  there  is  nothing  to  show  how  it  did  happen,  and  there- 
fore it  is  left  in  doubt  as  to  whether  it  happens  in  the  course  of  a  man's  employ- 
ment. Now,  it  seemed  to  me  that  possibly  it  might  be  proper  to  provide  that 
where  the  accident  happened  that  there  should  be  a  presumption  that  it  arose  out 


208  MIXUTES  OF  EVIDENCE:  No.  65 


of  the  employment  unless  the  contrary  be  shown  by  the  employer.  Under  the 
present  law  a  good  deal  of  hardship  is  created.  A  man  is  killed,  nobody  being 
present,  and  the  death  may  have  happened  in  two  or  three  different  ways,  and 
sometimes  a  man's  representatives  have  failed  because  there  was  nothing  from 
which  a  court  or  jury  could  draw  properly  the  inference  that  he  was  killed 
owing  to  something  that  he  was  not  himself  responsible  for.  Do  you  follow  what 
I  mean? 

Me.  Miller:  A  man  being  killed,  without  witnesses. 

The  Commissioner  :  Without  witnesses.  Ought  it  not  fairly  to  be  pre- 
sumed that  that  accident  arose  out  of  his  employment  unless  the  employer  shows 
the  contrary. 

Me.  Banceoft:  Certainly.  I  would  say  the  inference  is  if  he  was  killed  he 
was  following  his  employment. 

The  Commissionee  :  There  was  a  curious  case  in  which  the  workman  failed 
under  the  British  Act.  They  were  working  at  threshing,  and  a  wasp  stung  one 
of  the  men  that  was  working,  and  blood  poison  set  in  and  he  died.  He  could 
not  recover  anything.  They  held  while  the  injury  happened  during  his  employ- 
ment it  did  not  arise  out  of  his  employment,  and  it  might  happen  wherever  he 
was. 

Me.  Miller:  I  should  certainly  say,  yonr  Lordship,  that  it  did  arise  out  of 
his  employment.  The  very  fact  of  him  being  working  in  the  open  air  and  it  was 
possible  for  the  wasp  to  sting  him  while  he  was  acting  properly  in  his  employ- 
ment.    I  don't  see  that  it  could  be  brought  in  under  anything  else. 

The  Commissioxee  :  They  decided  the  other  way,  unfortunately  for  the 
man's  family. 

Me.  Miller:  I  may  say,  your  Lordship,  I  am  the  subject  of  compensation 
under  the  British  Act,  and  no  one  saw  my  accident. 

The  Commissioner:     I  am  talking  about  the  man  that  is  killed. 

Mr.  Millee:  Had  I  been  killed  the  cause  would  have  been  the  same.  Had 
the  article  hit  me  on  the  body.it  would  have  gone  right  through  me,  but  instead 
of  that  it  hit  my  finger,  cutting  it  completely  off.  Nobody  saw  it,  although  I 
was  working  in  a  shop  with  50  or  60  others,  and  some  of  them  close  by  me.  But 
there  was  no  question  that  it  arose  out  of  the  course  of  my  employment  because 
nobody  saw  it. 

Mr.  Meeeditii:  I  have  been  railroading  since  1S66.  That  is  something  over 
forty-five  years,  and  I  have  found  that  it  is  one  of  the  greatest  difficulties  in  the 
world  to  settle  the  responsibility  for  an  accident.  I  have  made  out,  I  was  going  to 
Bay,  many  hundreds  of  casualty  reports,  being  a  conductor  on  the  train,  and  you 
will  find  every  different  workman  in  his  different  class  will  try  to  set  the  acci- 
dent on  to  the  other  fellow,  and  the  company  will  generally  try  if  a  man  is 
killed  to  put  the  blame  on  him.  That  is  how  I  have  found  it.  A  dead  man  can 
say  nothing.  Therefore  you  will  find  it  is  perhaps  one  of  the  hardest  things  in 
the  world.  When  we  had  an  accident  happen  it  was  my  duty  to  go  home  and 
make  out  a  casualty  report  and  to  send  it  in  to  the  superintendent  as  to  what  I 
thought  was  the  cau.-c  of  it.  and  more  often  than  not  you  would  gei  into  a  row 
if  you  put  in  jusl  what  you  thought  was  the  right  thing.  If  it  reflected  a  little 
on  the  company,  why,  you  were  pretty  nearly  sure  to  lose  your  job.  That  was 
pretty  near  a  dead  certainty. 

The  Commissioner:   How  many  years  did  you  say  you  had  been  there? 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  209 

Me.  Meredith:  I  started  in  1866. 

The   Commissioner:   You   must  have   made  out  the  reports   and   doctored 
them  up  to  suit  the  company  to  stay  so  long? 

Me.  Meredith  :  A  man  when  he  is  working  for  a  living  I  tell  you  is  mighty 
careful  what  he  says.  That  is  my  excuse.  Now,  perhaps  it  is  out  of  the  way 
to  talk  ahout  this  accident  where  these  people  were  killed,  but  still  I  think  it 
should  be.  I  was  down  there  yesterday,  and  to  a  practical  man,  a  man  that  is 
a  railroad  man,  there  is  no  reason  to  think  that  it  wasn't  the  faulty  construction 
of  the  switch  that  caused  the  accident.  That  switch  is  a  regular  man-killer,  I 
would  call  it,  when  that  switch  was  put  in  like  that  on  that  sharp  curve.  There 
is  no  protection  made  whatever  if  a  car  happened  to  race  away,  which  is  very  likely 
to  happen  on  a  grade  like  that.  That  is  my  experience  of  it.  There  is  no  reason  in 
the  world  why  it  should  stay  on  the  track.  The  chances  are  that  it  is  almost 
sure  to  go  over  if  it  was  going  anything  over  ten  miles  an  hour.  I  took  particu- 
lar stock  in  it,  and  yet  most  people  are  blaming  that  motorman  for  running  the 
car  down  that  hill.  Perhaps  it  is  right.  I  am  not  saying  it  isn't,  but  still  the 
primary  cause  of  that  accident,  if  I  was  making  out  a  casualty  report,  I  should 
say  was  that  faulty  switch  which  was  not  put  in  right.  Yet  if  I  was  working  for 
the  company  I  would  he  mighty  careful,  mind  you,  if  I  had  a  good  job  earning 
two  or  three  dollars  a  day,  how  I  put  in  that  report.  I  should  probably  figure  it 
out  and  put  it  in  in  such  a  way  that  nobody  could  be  blamed  for  it.  I  confess 
it.  I  have  made  out  reports,  simply  because  I  wanted  to  keep  my  job.  I  had  a 
family  that  I  was  working  for  and  I  had  a  home  that  I  wanted  to  keep  up,  and 
a  man  is  naturally  careful  about  those  things;  and  1  say  in  this  Compensation  Act 
what  we  want  as  railroad  men  is  something  that  will  give  a  man  fair  compensation, 
never  mind  what  it  is.  Sir  William  puts  it  quite  nicely  there,  where  it  is  purely 
his  own  fault  that  he  gets  hurt,  and  he  hurts  someone  else  into  the  bargain,  but 
at  the  same  time  that  man's  family  has  to  be  looked  after;  you  can't  let  them 
suffer;  you  have  got  to'  look  out  for  them.  I  think  I  would  make  it  a  little  wider 
than  the  workmen.  A  farmer  is  a  workman,  and  Sir  William  himself  is  a  work- 
man. Probably  he  has  got  enough  money  and  he  does  not  need  a  couple  of  thou- 
sand dollars  if  he  got  hurt,  or  his  family  doesn't,  but  the  biggest  part  of  us 
do,  you  know;  $2,000  comes  in  mighty  handy  if  a  man  gets  knocked  out.  T 
think  it  should  be  made  in  such  shape  that,  never  mind  what  happens,  something 
should  be  done.  That  is  my  impression,  and  I  don't  expect  to  get  anything  either. 
I  have  quit  railroading  now,  although  I  am  still  a  railroad  man,  and  say  that 
I  would  give  a  man,  or  his  family — I  wouldn't  give  it  to  the  man  if  he  was  put 
in  jail — it  is  no  use  to  him — I  would  give  it  to  hi?  family.  This  State  insur- 
ance that  Brother  Bancroft  put  in  is  a  splendid  thing.  It  is  not  fair  to  ruin 
an  employer  because  he  happens  to  meet  with  a  serious  accident,  but  at  the  same 
time  the  people  have  got  to  live.  I  am  on  the  City  Board  of  Sick  Relief,  and 
I  am  going  around  every  day  pretty  nearly  relieving  poor  families,  and  really  as 
a  rule  you  could  say  it  was  not  their  own  fault,  but  the  poor  things  have  got 
to  live.     That  is  the  way  I  look  at  it.     Somebody  has  got  to  help  them. 

The   Commissioner  :    Mr.   Kcnnin,   did  you   send  a  message  to  Mr.   Drurv, 
and  to  Mr.  Smith  and  to  Mr.  Gregory? 

Mr.  Kennin:     Yes,  Sir  William. 

The  Commissioner  :  It  is  surprising  to  me  that  these  bodies  of  persons  that 
assume  to  represent  the  farming  interests  of  this  country  do  not  seem  to  wake 
14   L. 


210  MINUTES  OF  EVIDENCE:  No.  65 


up  to  the  fact  that  what  has  been  asked  for  is  that  the  farmers  should  be  brought 
under  the  operation  of  this  act.  They  never  have  been,  in  this  country,  up  to 
the  present  time,  and  they  are  not  in  the  State  of  Washing-ton.  I  do  not  know 
whether  it  is  intended  that  those  who  assume  to  speak  for  them  want  the  thing 
to  go  by  default  and  concede  that  the  act  should  be  applicable  to  the  farming 
industry.  I  should  think  it  would  be  well  if  somebody  would  attend  on  their  be- 
half to  state  what  their  views  are. 

Mr.  Wegenast,  have  you  anything  to  ask  these  gentlemen  who  represent 
Labour  ? 

Mr.  Wegenast:  No,  I  think  not,  Your  Lordship. 

The   Commissioner:     That  Washington  Act  has   only  been  in  force  since 
October  last,  I  think,  and  it  is  very  difficult  to  say  how  it  is  going  to  work  out. 
Some  people  seem  to  think  the  schedule  of  rates  is  altogether  too  low.     I  think 
we  should  have  somebody  from  the  accident  insurance  companies. 
Mr.  Gibbons  :     Couldn't  they  be  adjusted  from  time  to  time  ? 
The  Commissioner:     No  doubt. 

Mr.  Gibbons  :  So  far  as  I  could  gather  I  believe  the  proposition  of  the  manu- 
facturers was  to  insure  their  pay-roll.  I  am  not  surprised  that  they  haven't  any 
questions  to  ask  for  I  think  it  is  in  their  interests  as  well  as  the  workmen's.  We 
know  that  the  insurance  companies  are  not  in  business  for  their  health  hut  to  make 
a  profit,  and  if  there  is  a  State  insurance  the  State  is  not  here  to  make  a  profit.  I 
have  no  doubt  if  they  found  out  the  scales  were  too  high  they  could  adjust  them, 
and  it  would  be  insurance  at  cost  to  both  parties.  T  think  that  is  the  advantage  of 
State  insurance. 

The  Commissioner:  I  suppose,  Mr.  Gibbons,  you  have  read  what  a  member 
of  that  German  Imperial  Insurance  Department  has  to  say  about  the  operation  of 
their  system?  He  says  there  are  frightful  frauds  committed.  That  is  Mr. 
Friedensburg,  I  think.  I  don't  know  whether  he  is  a  prejudiced  witness  or  not,  but 
the  great  difficulty  in  State  insurance  is  to  prevent  fraud  upon  the  community  by 
dishonest  claims.  That  is  one  of  the  greatest  difficulties  under  any  Workman's 
Compensation  Act,  to  guard  against  claims  that  have  no  foundation  in  fact. 

Mr.  Wegenast:  There  is  one  thing  perhaps  I  might  mention.  I  wanted 
to  ask  Mr.  Bancroft  whether  any  action  had  been  taken  by  the  labour  organizations 
on  the  communication  which  the  chairman  of  our  committee  sent  a  week  or  so 
ago  suggesting  a  conference  to   discuss  the  whole  question? 

Mr.  Bancroft:  It  was  discussed  at  the  Trades  and  Labour  Council  meeting 
and  it  was  referred  to  a  committee  that  has  been  in  existence  for  eighteen  months. 
You  will  get  a  reply,  1  think,  to-morrow  or  the  day  after. 

M  r.  Dillon  :  Something  was  said  about  making  it  too  expensive  for  manu- 
facturers. Now,  we  have  an  inspector  that  comes  into  our  factory  and  he  tells  us 
where  he  wants  guards,  and  we  have  to  put  the  guards  on.  It  is  a  question  of 
coming  up  in  the  police  court  if  we  don't,  whether  we  think  it  is  safe  or  not  safe. 
The  inspector  calls  around  and  makes  an  inspection  quite  often,  and  he  tells  us 
wbat  be  wants  done.  Then  he  comes  shortly  afterwards  to  see  that  we  did  it.  Wo 
have  one  big  machine  there  and  we  had  to  guard  the  gears.  I  didn't  think  it  was 
altogether  dangerous,  but  he  said  it  might  be,  so  we  put  guards  on.  The  inspector 
looks  after  it  pretty  well  now.  T  know  ho  looks  after  my  factory  well.  We  have 
never  had  an  accident  in  our  factory,  but  wo  have  had  several  accidents  out  on 
buildings.  1  don't  think  the  employer  wants  to  see  an  accident.  Tie  is  as  careful 
as   the   workingmen.     Onlv   yesterday    I    wont   down   on    King  street   to   the  bank 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  211 


building,  and  the  man  was  putting  up  a  cornice.  They  all  have  instructions  to 
be  careful  and  to  build  scaffolds  that  are  safe,  and  if  there  isn't  sound  material 
on  the  job  they  are  to  get  it.  That  is  on  the  back  of  the  time  sheet.  This  man 
was  working  on  a  narrow  ledge  and  I  had  to  get  him  oil'  and  compel  him  to  build 
a  scaffold.  I  know  lie  was  doing  it  to  cheapen  the  work  and  to  get  it  done  a  little 
faster,  but  still  for  all  that  it  doesn't  cost  very  much,  so  I  compelled  him  to  build 
a  scaffold.  We  don't  want  accidents.  I  just  say  ibis  in  connection  with  what  was 
said  about  making  it  more  expensive  for  the  employers  or  the  manufacturers. 

Me.  Bancroft:  I  think  if  the  gentleman  will  get  Mr.  Schwedtman's  report 
that  was  given  at  the  Manufacturers'  Convention  he  will  find  that  prominent 
manufacturers  who  organized  their  own  mutual  trade  associations  had  rules  of 
their  own  for  governing  employers  who  would  not  come  up  to  certain  specification- 
and  safeguards.  I  think  if  "the  cost  of  State  insurance  is  made  absolutely  upon 
the  employers  then  the  employers  would  see  to  it  that  every  man  in  the  Canadian 
Manufacturers'  Association,  or  every  employer,  would  do  his  utmost  to  reduce 
the  risk,  or  a  penalty  would  be  imposed  if  they  didn't.  The  manufacturers  them- 
selves do  it  in  Germany. 

Mr.  Gibboxs:  The  statement  of  Mr.  Dillon  clearly  demonstrates  the  fact 
that  if  care  is  used  in  having  safety  devices  accidents  will  not  occur.  He  has 
stated  here  that  he  has  never  had  an  accident  in  his  factory.  It  has  been  the 
minimum.  That  is  due  to  the  fact  that  he  looked  after  his  scaffolding  so  as  to 
prevent  accidents,  while  another  man  would  allow  his  workmen  to  go  on. 

Mr.  Dillon  :    I  said  we  had  no  accidents  in  the  factory,  but  we  have  outside. 

The  Commissioner  :  He  may  have  been  fortunate  in  having  had  very  care- 
ful workmen.  You  cannot  eliminate  that  factor.  There  are  some  men  who  are 
careful  and  other  men  who  are  very  careless. 

Mr.  Miller  :  My  experience  of  the  planing  mills  around  here  in  four  years' 
work  is  that  they  are  not  to  be  compared  with  the  planing  mills  in  Britain.  There 
are  belts  running  from  the  floor  right  up  to  the  machines,  and  if  a  man  gets  his 
leg  in.  nothing  can  save  him,  and  there  is  no  inspector  comes  around  to  see  about 
it. 

The  Commissioner:  Why  do  you  not  as  a  public  benefactor  report  it? 
I  don't  think  it  is  right  to  blame  the  inspectors  if  people  whose  lives  and  limbs 
are  in  jeopardy  from  conditions  of  that  kind  do  not  take  the  trouble  to  write  to 
the  men  who  have  to  look  after  this,  calling  their  attention  to  it? 

Mr.  Miller:- There  are  also  piles  of  lumber  in  some  of  the  mills  too  danger- 
ous for  men  to  stand  around  them.  I  myself  have  been  a  victim  in  one  of  the 
planing  mills. 

Mr.  Bancroft:  The  evidence  that  was  given  here  by  the  representative  of 
the  Brotherhood  of  Eailroad  Engineers  shows  that  the  employers  make  it  so  that 
the  men  cannot  complain.  Take  a  big  industry  to-day  where  there  is  something 
happening  that  needs  the  inspector's  attention,  and  a  man  sends  a  letter,  and  it 
comes  out  that  his  name  is  at  the  foot  of  it,  and  he  won't  have  his  job  ten  minutes. 

The  Commissioner  :     These  are  all  confidential  communications. 

Mr.  Bancroft:  We  attempted  once  to  get  a  whole  lot  of  evidence  regarding 
bridge  construction  in  Ontario  where  the  men  were  not  being  paid  according  to 
their  contracts,  and  there  wasn't  one  man  who  dared  sign  his  name.  He  would 
give  you  all  the  evidence  but  he  wasn't  willing  to  do  more.  There  are  conditions 
that  make  it  so  they  won't  complain.  It  is  a  matter  of  bread  and  butter  to  them. 
It  should  not  be  a  workman's  business  to  make  the  factory  inspectors  inspect  build- 
ings;  it  is  a  matter  for  the  Department. 


212  MINUTES  OF  EVIDENCE:  No.  65 

i . ___ 

The  Commissioner:  I  should  say  that  every  honest  citizen  should  do  all  he 
can  to  assist  the  provincial  officers  in  having  the  machinery  and  applances  in 
proper  order.  I  should  think  there  was  a  moral  duty  upon  every  man  who  knew 
of  a  defective  condition  in  his  shop  to  communicate  that  to  the  factory  inspectors. 

Mr.  Doggett  :  Your  Lordship,  only  last  night  I  was  attending  an  inquest 
down  at  the  City  Morgue  regarding  the  reason  of  the  death  of  one  of  our  members 
last  week,  where  one  of  the  outlooks  on  a  scaffold  collapsed,  and  as  the  gentleman 
over  here  says  it  is  very  difficult  to  get  men  who  are  in  the  employ  of  a  company 
or  contractor  to  come  up  and  tell  the  truth.  Last  night  down  there  we  had  the 
men  that  were  working  there,  and  although  the  man  that  was  killed  was  a  brother 
member  and  a  fellow  craftsman,  those  men  were  in  that  position — they  recognized 
the  fact  that  the  two  contractors  were  there,  and  they  were  afraid.  The  Coroner 
last  night  could  not  get  evidence  out  of  those  men.  The  economic  conditions  that 
those  men  are  working  under  prevented  them,  the  way  I  saw  things,  from  giving 
evidence.  They  were  afraid  if  they  gave  evidence  in  favour  of  the  people,  who  will 
take  action  I  presume  against,  those  contractors,  they  would  lose  their  jobs. 

The  Commissioner  :  How  do  you  know  they  could  have  given  evidence 
against  the  contractor?     Did  you  take  the  trouble  to  enquire? 

Me.  Doggett:  I  might  state,  your  Lordship,  that  I  went  up  to  this  par- 
ticular job  before  there  was  another  nail  driven,  or  before  any  more  work  was 
done,  after  the  accident  took  place,  and  any  man  that  is  a  practical  carpenter 
going  up  there  could  see  in  a  minute  exactly  how  that  accident  happened.  I  had 
no  chance  to  see  the  outlook  that  was  pulled  down  or  fell  down  until  I  got  down 
to  the  inquest  last  night,  but  I  had  explained  to  our  organization  just  exactly  how 
the  nails  were. 

The  Commissioner:  Was  that  not  the  fault  of  some  artisan  or  scaffold 
builder  ? 

Mr.  Doggett:    The  fault  was  with  the  man  that  built  that  scaffold. 

The  Commissioner  :  Then  why  in  the  name  of  common  sense  will  men  who 
are  employed  and  whose  duty  it  is  to  do  the  work  properly  and  who  have  the 
facilities  for  doing  it,  jeopardize  the  lives  and  limbs  of  their  brother  workmen  by 
doing  the  work  in  a  manner  in  which  you  say  it  is  done.  You  want  education. 
You  want  to  educate  the  men  of  your  organization. 

Mr.  Doggett  :  That  is  quite  right,  your  Lordship.  We  recognize  that,  but 
under  the  present  competitive  system,  when  prices  are  so  keen,  and  contractors 
are  jumping  over  one  another  to  come  out  on  top  of  the  job — and  in  this  case  one 
of  the  contractors  helped  the  oilier  man  to  put  the  scaffold  up.  Now,  there  has 
,been  quite  a  bit  of  talk  this  morning  about  accidents  in  industry.  If  your  Lord- 
ship will  take  note  of  the  daily  papers  in  this  city  you  will  notice  the  building 
trades  are  suffering  a  great  deal  lately  from  want  of  proper  protection  on  scaffolds. 
Even  on  ibis  building  thai  is  being  rectified.  Around  in  the  west  wing  there  have 
been  open  well  holes  and  open  stairways  without  any  protection,  right  in  the  build- 
ing where  the  Commission  was  sitting  on  Compensation  to  Injured  Workmen  and 
in  the  building  where  the  Legislature  or  the  Governmeni  saw  fii  to  pass  a  Scaffold 
Bill. 

Tiir:  COMMISSIONER:  Did  you  go  in  to  the  Minister  of  Public  Works  and 
call  his  attention  to  it?  If  you  did  not  and  an  accident  happened  would  you  not 
be  to  some  extent  morally  responsible  for  it? 

Mr.  Doggett:  1  did  complain  to  the  foreman  carpenter.  If  you  go  over 
the  foreman  carpenter  the  cesull  is  every  time  almosi  they  will  refer  you  back  to 
the  foreman.  Tf  I  went  and  saw  Mr.  Lennox  he  would  say,  "  Have  you  seen  the 
foreman  ?" 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  213 

The  Commissioner:     Did  the  foreman  carpenter  do  anything  to  rectify  it? 

Mb.  Doggett:  There  was  a  railing  put  up  afterwards.  I  saw  it  myself  on 
some  of  the  stairs,  hut  other  openings  had  heen  made  and  other  places  were  left 
unprotected.  That  is  happening  all  the  time.  It  is  quite  true,  as  your  Lordship 
says,  we  need  a  great  deal  of  education  in  the  huilding  trades  to  protect  our- 
selves, hut  the  way  I  see  it,  we  have  got  to  legislate  against  the  careless  man  to 
make  him  protect  himself,  and  not  only  himself,  hut  the  wives  and  children. 
They  are  the  people  who  generally  suffer.  This  past  summer  in  the  city  of 
Toronto,  in  the  past  building  season,  we  had  an  enormous  number  <>f  scaffold 
accidents.  Our  organization  alone  has  had  live  serious  cases,  and  two  deaths  out- 
right. We  had  one  of  our  men  killed  at  Oakville  by  the  faulty  const  met  ion  of 
concrete  work,  where  the  mesh  iron  was  put  in  too  near  the  top.  Instead  of  being 
put  down  four  or  five  inches  it  was  half  an  inch  too  near  the  top.  This  legislation 
is  badly  needed  in  this  Province,  there  is  no  question  about  that. 

Mr.  Harris:  Would  you  make  it  a  criminal  offence  for  a  workman  to  con- 
struct improperly,  or  leave  improper  openings  of  this  kind?  How  are  you  going 
to  avoid  it  unless  you  punish  him? 

Mr.  Doggett:  Tlie  building  trades  in  general,  I  believe,  your  Lordship,  are 
always  endeavoring  not  only  to  lift  the  wages  of  the  workers  up,  but  to  see  that 
other  things  are  looked  after  in  their  interests,  such  as  the  proper  protection  on 

buildings.    Lots  of  these  cases  arise  where  contractors  in  the  city  of  Toronto . 

Take  the  job  at  the  present  Legislative  Building  where  perhaps  there  are  half 
a  dozen  different  contractors.  Perhaps  one  contractor  will  put  a  scaffold  up,  and 
the  tinsmiths  will  come  along  and  work  on  the  same  scaffold,  and  these  are  the 
conditions  that  we  are  confronted  with  in  the  building  trades  in  this  country. 

Mr.  Miller:  In  my  opinion  there  will  certainly  have  to  be  some  legislation 
along  with  the  compensation  on  safeguards  to  minimize  accidents.  In  Great  Britain 
if  an  employer  works  or  operates  a  machine  without  a  safeguard  that  has  been 
ordered  or  suggested  to  be  put  on  by  the  factory  inspectors,  or  if  it  is  a  regulation 
safeguard  that  is  required,  they  take  the  employer  to  court  and  fine  him  for  work- 
ing his  own  machines. 

The  Commissioner:     We  have  the  same  law  in  this  country. 

Mr.  Doggett:  1  would  like  to  ask  your  Lordship  a  question,  or  ask  any 
gentleman  around  that  could  answer  it.  Under  the  present  Compensation  law 
that  has  just  gone  into  effect  in  the  State  of  Washington  what  would  a  small 
building  contractor  pay  to  that  State  fund? 

The  Commissioner:  He  would  pay  upon  his  wage  roll  just  the  same  way. 
Of  course  there  will  be  great  difficulties  in  working  out  a  law  such  as  that,  to  make 
the  State  tax  collector  hunt  up  everybody  that  has  anybody  in  his  employment  and 
collect  a  tax  from  him.  I  don't  know-  whether  the  thing  will  break  down  of  its 
own  weight. 

Mr.  Bancroft:     They  have  travelling  auditors. 

The  Commissioner:  Fancy  over  this  Province  with  hundreds  of  thousands 
of  employees,  and  the  thousands  of  establishments.  The  Government  would  require 
an  army  of  officials  to  hunt  up  all  these  people  and  then  collect  the  tax  from  them. 

Mr.  Dillon:  The  insurance  companies  have  those  now,  and  we  pay  to  the 
insurance  companies. 

The  Commissioner:     If  you  don't  insure  then  you  bear  the  loss  yourselves. 

Mr.  Dillon  :  I  would  rather  have  it  compulsory  insurance.  I  think  it 
would  lessen  it  some. 


314  MINUTES  OF  EVIDENCE:  No.  65 

The  Commissioner  :  But  you  don't  want  to  be  delivered  over  with  com- 
pulsory insurance  to  the  mercy  of  the  company? 

Mr.  Dillon  :     Oh  no,  not  the  mercy .  of  the  company. 

Mr.  Gibbons:  In  the  building  trades  everybody  has  to  take  out  a  permit, 
and  they  can  find  out  from  the  places  where  permits  are  taken  out  who  has  built. 
The  Government  could  do  it  that  way. 

The  Commissioner:  The  tax  is  collected  in  localities.  I  don't  know  how 
this  State  of  Washington  law  is  going  to  work.  I  have  forgotten  whether  there  is 
any  machinery  provided. 

Mr.  Bancroft  :    Yes,  it  is  in  the  last  few  pages. 

Mr.  Wegenast:  Just  at  this  juncture  it  might  be  well  to  say  that  in  the 
State  of  Washington  both  the  employer  and  the  employee  have  been  almost  too 
anxious  to  report. 

The  Commissioner:     Beport  what? 

Mr.  Wegenast  :  Beport  pa}T-rolls,  accidents,  and  everything.  The  Insurance 
Commissioners  have  been  flooded,  so  to  speak  with  reports.  The  persons  in  charge 
of  the  Department  for  the  administration  of  the  Act  are  three  Commissioners  and 
their  assistants,  a  staff  of  twelve.  I  have  been  in  rather  close  touch  since  I  visited 
the  State,  particularly  with  the  active  Commissioner,  and  so  far  as  he  reports  to 
me  there  is  no  difficulty  whatever  in  regard  to  that  feature. 

The  Commissioner:  I  wouldn't  want  to  be  the  Prime  Minister  who  passed 
a  law  that  made  it  necessary  to  go  to  everybody  employing  a  man  and  demanding 
of  him  a  tax  every  year. 

Mr.  Wegenast  :  In  the  State  of  Washington?  it  only  applies  to  extra  hazard- 
ous industries,  but  there  is  a  provision  that  it  may  be  made  wider  by  consent.  I 
think  there  is  no  doubt  the  reason  it  was  hedged  about  in  that  way  was  because  it 
was  thought  it  would  not  be  constitutional  if  made  applicable  fo  the  lesser  indus- 
tries. 

Mr.  Bancroft  :  That  is  the  great  difficulty  over  there. 

The  Commissioner  :  I  do  not  see  any  machinery  for  collecting  this  tax. 

Mr;.  Wegenast:  They  have  machinery,  your  Lordship.  It  may  not  be  in 
that  act.  but  I  have  in  my  office  copies  of  the  first  reports,  and  a  good  deal  is 
being  left  to  the  judgment  of  the  Commissioners.  A  good  deal  is,  of  course,  not 
yet  worked  out. 

The  Commissioner:  Their  system  enables  it  to  be  done  more  simply  than 
in  this  country.  There  they  collect  the  State  tax  through  local  municipal  organi- 
zations. 

Mr.  Wegenast:  I  do  not  think  they  depend  on  State  taxation.  I  think  the 
employer  sends  his  cheque. 

Mi:.  Kim  <  e:  At  the  present  time  there  is  an  income  tax  law,  and  isn't  it  a 
criminal  offence  to  offend  against  that  law? 

The  Commissioner:    That  is  a  municipal  law. 
Mi;.  Bruce:     Wouldn't  it  be  as  applicable  as  the  other? 

The  Commissioneb  No.  if  they  are  not  going  to  do  it  through  the  munici- 
pal body.    You  wouldn't  want  an  army  of  officials  going  around  all  the  time. 

Mr.  Bancroft:  Why  should  you  assume  that,  your  Lordship?  All  legis- 
lation that  has  had  for  it-  objed  the  interest  of  the  worker  in  any  particular,  that 
has  been  the  first  argumenl  generally  used,  that  it  will  need  an  army  of  officials. 
We  nerd  ;m  army  of  officials  for  every  piece  of  legislation,  and  surely  there  should 
be  no  objection  on  that  account. 


1912  WORKMAN'S  COMPENSATION  COMMISSION.  315 

<. _ —     i 

The  Commissioner:  I  should  say  it  was  a  most  cogent  argument.  In 
democratic  countries  they  are  borne  down  by  the  weight  of  these  parasites  thai  are 
living  upon  the  community.    Thai  is  the  trouble. 

Mr.  Bancroit:   Which  parasites? 

The  Commissioner:  1  am  talking  about  an  army  of  officials.  They  are 
parasites.  I  don't  use  it  offensively,  but  they  are  eating  up  the  substance  of  the 
people. 

Mr.  Bancroft:  There  are  an  army  of  parasites  in  connection  with  every 
legislation,  and  it  seems  peculiar  that  it  should  be  mentioned  as  to  legislation 
with  regard  to  the  workers.  The  same  argument  was  used  in  Great  Britain  as  here, 
but  it  hasn't  proved  to  be  true. 

The  Commissioner  :  There  is  no  use  talking  about  legislation  that  at  present 
is  merely  experimental.    They  haven't  got  to  the  end  of  it. 

Mr.  Bancroft:  Is  it  not  possible  to  administer  a  Workmen's  Act  in  Ontario 
without  an  army  of  parasites? 

The  Commissioner  :  I  am  not  talking  about  the  AVorkmen's  Compensation 
at  all.     I  am  talking  about  State  insurance. 

Mr.  Bancroft:  The  arguments  that  are  used  against  workmen's  compensa- 
tion say  that  it  is  the  workers  that  need  education.  The  workers  of  this  country 
as  well  as  any  other  country  go  to  school  until  they  are  fourteen  years  of  age,  and 
then  they  are  sent  out  in  the  battle  of  life  to  earn  their  living,  and  they  are  subject 
to  all  the  economic  conditions,  and  they  are  speeded  up  to  the  limit  to  earn  a  liv- 
ing and  to  make  the  employer's  profit,  and  Avhen  an  accident  occurs  they  say  the 
workers  need  education.  If  the  workers  had  the  intelligence  to-day  that  they  ought 
to  have  they  wouldn't  allow  these  things  to  stand  for  a  moment.  I  feel  that  keenly 
this  morning.  We  have  been  asking  for  education  for  the  workers  from  time 
immemorial,  and  we  are  asking  to-day,  and  it  isn't  given  to  them.  It  is  not  their 
fault  that  they  haven't  got  education  to  understand  these  things.  That  argument 
might  be  used  against  protecting  little  children  because  they  are  ignorant,  but  the 
legislation  protects  little  children,  and  they  haven't  got  education  or  anything 
else.  It  is  compulsory.  From  what  we  believe  about  legislation,  it  is  to  protect 
the  weak  against  the  strong,  it  is  to  protect  those  that  cannot  take  care  of  them- 
selves, and  if  the  workers  are  brought  under  economic  conditions  where  they  can- 
not take  care  of  themselves  then  it  is  absolutely  necessary  that  there  should  be 
some  legislation  in  the  nature  of  workmen's  compensation. 

The  Commissioner:  You  are  missing  the  point.  You  are  making  a  moun- 
tain out  of  a  molehill.  The  point  is,  and  Mr.  Doggett  has  admitted  it,  that  the 
workmen  are  not  so  careful  of  the  lives  and  limbs  of  their  fellow  men  as  thev  ought 
to  be,  and  they  need  education  on  that.  It  is  not  a  matter  of  want  of  knowledge, 
or  children  having  education ;  it  is  a  matter  of  teaching  them  what  they  ought  to 
do  to  protect  the  other  men  and  to  prevent  an  accident  to  the  other  man. 

Mr.  Bancroft  :  Then  I  think  the  point  of  Mr.  Doggett's  argument  has  been 
missed,  and  I  would  ask  Mr.  Doggett-  to  explain  that. 

Mr.  Doggett  :  I  think  I  said  previously  the  economic  conditions  that  prevail 
to-day,  that  men  are  living  and  working  under  make  men  do  things  that  they 
would  not  do  under  a  different  system. 

The  Commissioner:  There  is  no  doubt  about  that,  but  there  is  no  use  put- 
ting our  heads  in  the  sand.  There  is  no  doubt  that  workmen  are  extremely  careless 
in  their  work,  although  they  know  if  the  work  is  hadly  done  it  may  jeopardize  the 
lives  of  their  fellow-workmen.    We  must  deal  with  conditions,  not  fanciful  theories. 


216  MINUTES  OF  EVIDENCE:  No.  65 

i . 

Mr.  Meredith:  I  know  in  railroading  every  department  tries  to  run  its  de- 
partment as  cheap  as  they  can.  Now,  that  is  probably  the  fundamental  principle 
under  which  a  great  many  accidents  happen.  The  locomotive  department  tries 
to  run  its  department  with  as  little  money  as  they  can,  and  the  car  department  the 
same,  and  the  road  department  the  same;  and  we  find  when  an  accident  occurs 
each  one  of  these  departments  tries  to  lay  the  fault  on  the  other. 

The  Commissioner:  We  are  getting  far  afield.  The  question  raised  was  a 
question  of  scaffolds.  The  employer  gives  to  his  workmen  material  to  put  up  a 
scaffold  properly,  and  they  don't  nail  it  properly  or  they  don't  put  it  into  put- 
locks  properly,  and  that  is  what  we  want  to  guard  against.  That  is  what  I  under- 
stood Mr.  Doggett  to  speak  of  when  he  spoke  of  education  needed  by  the  working- 
men.    I  think  they  need  it. 

Mr.  Meredith:  I  think  he  said  they  skipped  their  work  on  account  of  eco- 
nomic conditions. 

The  Commissioner  :  That  would  not  appeal  to  me  at  all.  It  is  not  common 
sense.  No  doubt  there  are  a  great  many  things  a  man  does  under  the  stress  of 
modern  industry  that  he  would  not  do  if  there  was  not  stress,  but  there  is  no  use 
giving  me  the  idea  that  every  workman  is  angelic  when  everybody  knows  there  are 
careless  men  and  reckless  men  in  the  business,  and  these  are  the  men  against 
whom  their  fellow  workmen  require  some  protection. 

Mr.  Gibbons  :  There  is  one  explanation  I  might  make.  As  you  are  aware, 
manufacturers  and  contractors  are  in  business  for  profit,  and  the  workmen  recog- 
nize the  fact  that  the  men  who  they  retain  in  their  service  are  those  who  bring  them 
the  greatest  profit,  and  a  man  who  takes  a  lot  of  time  in  order  to  make  things  sure, 
while  he  is  doing  that  he  is  not  making  profit  for  the  contractor,  and  therefore 
they  retain  the  men  in  their  service  who  bring  them  a  good  deal  of  profit,  and  a 
man  rushes  his  work  to  hold  his  job.  It  is  the  economic  conditions  that  bring  that 
about.  You  take  a  man  and  educate  him  so  that  he  will  make  everything  solid 
and  you  will  find  he  is  not  retained  by  the  contractor  very  long,  and  rather  than 
lose  his  position  he  rushes  the  job  as  fast  as  he  can,  and  while  he  is  rushing  the 
job,  while  he  may  think  it  is  all  right,  yet  he  hasn't  taken  time  to  see  it  is  secure. 

Mr.  Miller:  I  would  like  to  say  in  connection  with  this  carelessness  on  the 
workman's  part  one  of  the  principles  of  the  workmen's  compensation  is  not  only 
to  give  compensation  but  to  prevent  accident.  I  want  to  say  this  too  in  connection 
with  the  scaffold  accident  that  Brother  Doggett  mentioned,  if  the  contractor  is 
not  going  to  supervise  his  work  properly  by  putting  a  superintendent  on  each 
building  to  see  that  the  scaffolds  are  properly  made,  as  well  as  all  other  parts  of 
work,  then  he  has  to  suffer  and  should  suffer  for  any  accident  that  occurs  on  that 
building.  Now,  the  fact  is  that  in  many  cases  there  is  no  proper  supervision  on 
the  smaller  buildings  in  this  city.  The  contractor  himself  goes  around  from  one 
job  to  another  and  he  has  many  a  time  no  recognized  foreman  on  these  buildings. 
1  mean  whore  the  buildings  are  only  small,  residential  property,  and  so  on,  he 
gives  instructions  and  he  £oos  away,  and  those  instructions  may  be  carried  out 
to  the  belief  of  the  workmen  that  they  are  doing  what  their  employer  wished  them 
to  do.  They  always  know  for  certain  he  wishes  them  to  hurry  and  when  he  comes, 
around  again  probably  there  has  been  an  accident.  Why?  Because  as  1  pay  there 
has  not  been  proper  supervision  on  that  building.  Now.  the  employer  should  bear 
the  onus  of  supervising  his  work  in  a  proper  manner  and  these  accidents  would  be 
prevented;  and  I  think  this  workmen's  compensation,  if  it  is  brought  in  at  all  for 
the  benefit  of  the  workers  and  for  the  safeguarding  of  the  workmen  in  their 
employment,  will  certainly  put  the  onus  of  supermten'ding  the  work  on  the 
employiT. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  2Vt 

The  Commission  ke :  Surely  you  do  not  moan  to  put  forward  such  a  proposi- 
tion that  it  a  man  has  an  experienced  scaffold  builder,  and  lie  has  got  three  men 
working  on  a  house,  he  has  to  go  to  the  expense  of  employing  a  superintendent  in 
addition? 

Mr.  Miller:  No,  hut  he  should  have  a  superintendent  on  that  building  all 
the  time. 

The  Commissioner:     It  would  he  utterly  impossible. 

Mr.  Miller:  It  only  means  a  matter  of  four  or  live  eents  an  hour.  I  don't 
think  it  is  a  very  great  hurden  on  the  industry. 

The  Commissioner  :  The  unreasonable  demands  that  are  made  by  some  of 
the  working-men,  or  those  who  assume  to  speak  for  them,  creates  a  prejudice  against 
their  reasonable  claims.  They  do  not  seem  to  recognize  any  man  has  rights 
except  the  man  that  works  with  his  hands. 

Mr.  Miller:  1  don't  take  that  position  at  all.  What  I  maintain  is  that  if  a 
man  is  building  a  two  or  three  storied  house,  from  seven  to  twelve  rooms,  there 
certainly  should  he  a  foreman  on  that  building  who  should  take  the  onus  in  the 
absence  of  the  employer  for  anything  that  is  occurring  on  that  building.  That  only 
means  a  matter  of  four  or  five  cents  an  hour. 

Mr.  Bancroft  :  I  flunk  those  are  tremendously  strong  remarks,  your  Lord- 
ship.    I  should  like  you  to  give  us  an  instance. 

The  Commissioner  :    I  intended  them  to  be  as  strong  as  I  made  them. 

Mr.  Bancroft:  Your  remarks  are  not  based  upon  the  experience  of  those 
who  know  the  conditions  about  which  they  are  speaking,  and  I  don't  know  of  any- 
thing that  would  call  for  the  remark  that  organized  labour  is  unreasonable  in 
respect  to  the  rights  of  individuals 

The  Commissioner:  Sit  down,  sir.  You  have  no  right  to  misinterpret  me. 
I  have  not  said  anything  of  the  kind.  I  will  not  listen  to  you  at  all  if  you  attempt 
to  misrepresent  what  I  say.  T  wasn't  talking  about  organized  labour.  I  am  talking 
about  certain  people  who  assume  to  speak  on  behalf  of  labour,  that  they  make 
unreasonable  statements  which  prejudice  the  reasonable  demands  of  labour.  I 
know  what  I     am  talking  about. 

Mr.  Doggett:  We  recognize  the  fact  as  workers  that  there  are  extremist- 
on  both  sides.  We  are  not  all  perfect,  and  we  have  not  all  been  given  the  same 
dispositions  or  the  same  ability.  We  recognise  that.  1  am  willing  to  admit  that. 

The  Commissioner  :  It  does  me  good  to  hear  a  man  like  you  speak,  Mr. 
Doggett.    It  shows  there  is  reason  in  the  thing. 

Mr.  Doggett:  I  didn't  just  get  through,  your  Lordship.  I  wanted  to  say 
there  are  employers  of  labour  who  look  upon  a  man  who  does  use  his  hands  as.  prac- 
tically speaking,  insignificant,  and  takes  no  account  of  him  at  all,  and  they  are 
extremists  as  well.  There  are  extremists  on  all  points — we  recognize  that — but  T 
don't  think  there  has  been  anything  said  here  this  morning  that  has  antagonized 
either  interest,  on  one  side  or  the  other. 

The  Commissioner:  At  Cobalt  I  had  a  gentleman  who  did  not  hesitate 
boldly  to  say  that  there  must  be  eternal  warfare  between  the  employer  and  the 
employee,  and  all  he  wanted  was  to  get  compensation  on  these  lines  as  the  thin 
end  of  the  wedge  to  upset  the  social  order  altogether.  That  is  the  kind  of  man 
I  am  talking  about.  Gentlemen,  when  they  come  to  discuss  and  make  a  law.  have 
to  endeavour  to  discuss  it  fairly  and  try  to  look  at  both  sides  of  the  question,  and  not 
to  press  unreasonable  views  or  want  to  press  home  things  that  would  not  be  fair  to 
the  other  side.  I  am  not  expressing  any  opinion  as  to  what  is  fair,  but  T  have 
heard  some  remarks  that  seemed  to  me  to  indicate  that  the  person  who  made  them 


218  MINUTES  OF  EVIDENCE:  No.  65 

had  not  fully  considered  what  he  was  saying  and  apparently  was  shutting  his  eyes 
entirely  to  there  being  anything  to  be  said  upon  the  other  side. 

Me.  Meredith  :  I  think  it  would  be  a  pity  if  there  was  any  antagonism 
here.  I  think  we  have  come  with  the  intention  of  trying  to  do  the  best  we  can  for 
everybody,  and  to  make  it  good  for  the  employer  as  well  as  the  employee.  I  know 
that  is  the  object  of  the  Brotherhood  of  Eailroad  Trainmen.  We  are  working  as  well 
as  we  can  in  harmony.  Of  course  when  it  comes  to  a  matter  of  putting  up  the 
wages  the  employer  generally  thinks  it  would  be  better  if  they  could  pay  them  on  a 
lower  basis.  Well,  that  is  all  right.  That  is  his  side  of  the  question,  and  the  man 
has  the  other  view.  We  are  to-day  as  trainmen  working  to  cut  out  double-head 
trains.  We  consider  it  is  one  of  the  most  dangerous  things  that  is  done  perhaps 
on  the  railroad  to-daj,  to  run  a  train  with  two  engines  on  it.  I  believe  as  a  work 
man  that  is  so.  As  a  railroad  man  I  don't  expect  to  ever  run  on  them  again.  It 
is  the  same  in  all  these  things,  and  yet  they  will  run  them  because  they  think  it 
saves  a  little  money.  It  saves  a  gang  of  men  to  run  two  engines  on  a  train,  and 
yet  perhaps  if  they  worked  the  thing  out  with  some  one  who  understood  figures 
they  would  find  there  was  nothing  in  it,  and  that  they  didn't  make  money  on  it. 
But  they  think  they  do.  I  think  most  of  the  things  we  have  suggested  to  the 
Grand  Trunk  Railway — and  I  have  been  at  it  ever  since  there  has  been  anything 
of  the  kind,  for  perhaps  I  am  the  oldest  Union  man  in  Canada — I  think  that  what 
we  have  done,  as  a  rule,  worked  out  for  the  good  of  the  company  as  well  as  the 
men.  To-day  they  are  making  more  money  on  the  railroad  than  they  ever  did 
before,  and  I  believe  that  the  suggestions  of  the  men  have  helped  to  bring  about 
this  condition. 

Mr.  Dempster:  As  a  student  I  have  looked  at  this  matter  and  tried  to  keep 
myself  unprejudiced,  and  I  think  I  can  reasonably  say  and  truthfully  say  that  I 
•can  look  at  it  with  an  unprejudiced  mind-  But  there  is  plainly  here  to-day  a 
pulling,  a  see-sawing,  to  get  legislation,  and  one  fellow  wants  to  get  the  best  of  it. 
Undoubtedly  it  is  so.  He  says  he  hasn't  had  the  best  of  it  in  the  past.  Now  it  is 
most  unfortunate  when  those  who  are  in  the  industrial  world  (for  I  think  the 
employer,  especially  the  small  employer,  and  the  worker  are  both  ^together  brothers 
in  the  one  thing),  that  as  we  have  heard  it  said  economic  conditions  are  such  that 
the  man  who  does  the  work  for  the  least  money  gets  the  contract.  Certainly  the 
public,  those  same  people  who  are  wage  earners,  buy  where  they  can  get  the  cheapest. 
They  have  produced  economic  conditions.  The  man  catering  to  them  says :  "  Can 
you  make  me  a  thousand  of  such  and  such,  or  so  many  dozen  of  such  and  such,  at 
a  certain  price  ?"  Very  often  they  go  to  the  workers  and  say :  "  Look  here,  we 
have  got  to  push  this  thing  through."  Machines  break  down  and  the  compensa- 
tion, where  does  it  come  from  ?  It  comes  out  of  what  was  considered  a  profit,  but 
which  finally  vanishes.  Workers  may  break  down,  but  when  the  work  is  finished 
who  has  profited  by  it?  I  have  tried  to  search  for  the  profits  and  place  all  the  pay- 
ments for  the  same  on  the  people  who  get  the  benefit,  and  I  find  the  people,  the 
public,  get  the  benefit  of  the  workers  in  the  industrial  world's  oxtremest  exertions, 
driven  at  a  high  rate  of  speed,  and  they  have  been  working  for  the  community  just 
as  much,  I  find,  as  the  army  called  military,  and  many  others,  and  I  have  found 
that  if  was  a  most  unfortnnate  thing  that  the  worker  should  be  left  with  litigation 
ahead  of  him  after  he  had  been  injured.  There  is  despairing  anxiety  as  to  how 
the  litigation  may  come  out,  no  matter  how  you  fix  this  law,  and  the  same  will  be 
the  case  until  the  final  arbitration  boards  decide:  and  then  the  solvency  of  the  one 
who  has  to  pay  for  it  comes  in,  and  it  will  probably  leave  you  at  the  latter  end  in 
a  worse  slnie  thnn  when  you  started.    It  seems  to  me  that  the  workers  in  the  indus- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  219 


trial  world,  and  they  are  all  one,  the  employer  as  well  as  the  workman,  because 
compensation  never  pays  for  the  injury  that  has  he  en  done  to  the  workman;  ii 
never  pays  it.  I  do  not  think  there  is  any  valid  argument  in  the  statement  some- 
times made  that  should  compensation  he  easily  obtained  the  worker  will  court 
injury.  A  man  is  insane  who  does  such.  There  is  no  employer  but  what  would 
almosl  even  risk  his  own  life  for  the  life  of  his  employee.  We  see  examples  all 
through  the  whole  world  to-day,  in  mining  accidents,  and  so  on.  Where  is  the 
man  that  will  not  risk  his  life  to  help  another  man,  and  yet  we  have  heard  to-day 
arguments  of  men  who  actually  place  on  one  side  one  class  of  men  as  wolves  try- 
ing to  eat  the  other.  It  is  unfortunate  such  ideas  are  getting  abroad.  We  are 
human  and  we  are  brothers,  after  all,  and  I  would  take  it  out  of  litigation  alto- 
gether. I  think  the  fact  that  the  man  can  hold  up  an  arm  and  show  it  is  maimed 
is  sufficient  proof  that  he  should  be  compensated  by  the  Government  who  in-  the 
name  of  the  people  should  see  that  the  worker  in  the  industrial  world  should  be 
looked  after.  The  people  to-day  look  after  them,  but  how  is  it  done?  Not  in  a 
manner  satisfactory.  It  makes  the  worker  who  has  been  injured,  and  we  all 
recognize  that,  live  on  the  people  to  some  extent.  It  may  be  selling  small  wares :  it 
may  be  friends  who  are  charitable;  but  it  makes  them  feel  like  a  recipient  of 
charity,  while  he  has  given  his  life,  and  he  has  been  sacrificed  on  the  altar  of 
industry  for  the  benefit  of  the  people.  Is  he  any  less  a  ward  of  the  State  than 
the  man  who  has  served  in  the  Fire  Department,  or  in  many  other  Departments, 
where  the  injured  members  are  looked  after  at  the  public  expense?  I  think  it 
ought  to  be  taken  away  from  the  worker  to  feel  that  despairing  anxiety  over  what 
will  be  the  result  when  he  has  been  injured,  and  I  would  recommend,  after  looking 
at  this  thing,  not  from  a  biased  standpoint,  but  a  fair  standpoint,  that  the  indus- 
trial workers  of  the  world  should  be  looked  upon  as  fairly  as  any  other  State  worker 
who  gets  pensions.  But  I  do  not  believe  in  saying  that  the  industries  that  are 
hazardous  should  pay  for  all  the  expense.  Why  should  they?  There  are  other 
industries  that  are  less  hazardous.  There  are  men  who  have  got  to  take  the  risk 
owing  to  economic  conditions.  We  hear  it  said  to  us  repeatedly  over  and  over 
again,  if  you  can't  come  to  the  mission  fields,  send  us  your  money.  Why  should 
those  who  have  got  the  best  positions  in  society,  so  far  as  industry  is  concerned, 
not  contribute  to  help  those  who  are  in  the  hazardous  industry?  I  think  it  is  only 
fair.  I  commend  this  to  your  Lordship.  I  think  the  state  ought  to  take  away 
from  the  workers  this  anxiety.  It  is  always  hedged  around  with  considerable  liti- 
gation, and  not  by  any  means  free  from  prejudice  and  heartburnings,  yes.  and 
bitter  feelings  often  for  a  long  time  afterwards,  not  only  on  the  part  of  the  injured, 
but  on  the  part  of  those  who  would  be  champions  for  such  people.  There  is  con- 
tinually hitter  strife  with  the  employer  and  employee,  and  both  of  them  when 
you  get  close  to  them  are  nearer  to  each  other  than  brothers,  and  yet  there  is  one 
trying  to  show  the  other  is  a  wolf  trying  to  eat  the  other.  There  are  illiterate  men 
who  need  education ;  they  are  on  both  sides.  They  have  now  inspectors  who 
look  after  machinery  and  who  look  after  the  interests  of  the  workers  to  some 
extent,  and  those  who  have  taken  the  onus  of  providing  compensation  would  look 
to  it  that  the  means  of  protection  were  adequate  and  sufficient.  The  investigation 
following  the  accident  wrould  put  the  blame  where  it  rightfully  belonged,  not  on 
the  employer,  because  he  was  the  employer,  but  on  the  man  who  was  the  cause  of 
tit,  let  him  be  employer  or  workman.  A  gentleman  here  said  make  it  expensive, 
but  you  would  probably  have  to  make  it  a.  year  in  jail  to  have  it  expensive  enough: 
but  I  would  commend  the  taking  of  this  matter  entirely  away  from  litigation. 
As  I  have  said  already,  let  the  maimed  or  injured  workman  have  argument  enough 
in  the  fact  that  he  has  been  injured  in  order  to  obtain  compensation. 


220  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Gibbons:  Now,  your  Lordship,  in  all  that  has  been  said  I  don't  think 
there  was  any  disposition  to  bring  about  the  impression  that  every  employer  is 
,a  man  of  that  kind.  We  all  know  it  is  a  matter  of  history  that  there  are  companies 
in  business  for  money,  and  in  those  cases  we  ask  for  legislation  to  protect  them. 
While  they  make  rules  they  do  not  expect  the  workman  to  carry  them  out.  While 
they  make  rules  they  make  conditions  so  that  you  can't  carry  them  oitt  and  retain 
your  job.  We  do  not  refer  to  the  fair  employer.  We  are  all  aware  of  the  fact 
that  there  are  fair  employers  and  employers  who,  without  any  Compensation  Act, 
do  the  right  thing  by  the  man  that  is  injured,  but  it  is  for  the  man  who  will  not 
do  that.  Now,  as  your  Lordship  said,  for  the  man  that  has  criminally  brought 
about  an  accident  we  don't  say  he  should  not  be  punished  for  it.  We  are  not 
speaking  in  general.    We  are  speaking  of  extreme  cases  only. 

Mr.  Miller  :  When  I  spoke,  Mr.  Chairman,  about  the  onus  of  the  superinten- 
dence being  put  upon  the  employer,  especially  in  the  building  trade,  I  didn't  intend 
at  all  that  it  should  be  an  inspector  with  a  big  salary  going  about  doing  nothing. 
The  kind  of  foreman  I  referred  to  in  that  case  is  this:  it  is  where  the  foreman 
works  as  well  as  the  other  men  do  and  who  is  producing  a  good  value  for  his  wages 
apart  from  his  superintendence.  Now,  at  the  first  sitting-  of  the  Commission  I 
endeavoured  to  point  out  the  burden  that  the  insurance  companies  placed  upon 
private  individual  employers  in  the  old  country,  and  I  gave  you  figures  to  show 
that  even  private  insurance  companies  didn't  make  it  an  unbearable  burden  on 
the  industries  for  the  private  employers  who  insured.  We  are  advocating  this 
morning  a  State  insurance  to  do  away  with  the  private  insurance  companies. 
They  are  out  to  make  all  the  profit  they  can,  and  we  want  the  legislation  to  be  of 
such  a  nature  that  the  workers  will  be  compensated  when  injured,  and  that  the 
legislation  shall  safeguard  the  workman  as  much  as  possible  by  preventing  accidents 
happening.  We  do  not  want  to  appear  this  morning  as  if  we  were  crying  for  the 
whole  loaf  as  it  were.  We  know  the  employer  has  to  live  as  well  as  we  have  to  live. 
We  only  want  a  fair  share  of  the  living,  a  fair  and  comfortable  life,  and  we  con- 
tend that  the  workers  are  entitled  to  that  and  they  should  be  safeguarded  from 
accident  in  their  employment.  When  a  man  to-day  is  killed  or  dies  from  occupa- 
tional disease,  the  family  becomes  a  burden  on  the  State  in  most  cases,  and  in  any 
case  it  is  the  State  that  is  bearing  the  burden  because  if  a  man's  family  has  to  go 
to  the  Workhouse  or  the  House  of  Industry  for  relief  is  it  not  the  State  that  is 
carrying  the  burden  there?  I  have  said  nothing  this  morning  with  the  intention 
of  antagonizing  anybody  whatever,  and  I  do  not  think  any  of  our  friends  around 
the  table  have,  and  I  should  be  sorry  to  think  they  did  so. 

Mr.  Dempster:  I  think  you  have  referred  more  than  once  to  the  fact  that 
there  should,  be  proper  superintendence.  It  would  be  difficult,  I  suppose,  for  you 
to  say  what  proper  superintendence  would  be,  but  as  far  as  I  have  seen  it  worked 
out,  say  for  the  man  who  has  two  men  earning  $3  a  day,  you  would  have  to  put 
another  mar  on  who  wouldn't  come  for  less  than  $6,  and  that  is  putting  too  much 
of  a  burden  on  it. 

All;.  Millee:  My  friend  doesn't  know  anything  about  the  condition  of  the 
building  trades.     Tie  does  not  understand  what  T  meant. 

Mi:.  Dempstee:  Bui  speaking  generally,  T  would  think  the  burden  would  lie 
too  great. 

Tin:  COMMISSIONEE :  He  said  he  didn't  mean  a  highly  paid  superintendent, 
but  a  foreman  who  works  and  would  superintend  for  a  fow  cents  an  hour  more. 

Mi;.  MiLLEft:  They  do  thai  until  the  superintendence  becomes  too  much. 
When  lie  has  got  a  dozen  men  under  him  then  he  is  not  expected  by  his  employer 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  321 

io  work  with  tools,  but  where  there  are  only  two  or  three  or  four.  It  is  in  those 
cases  where  most  of  the  accidents  are  occurring  to-day,  where  there  are  only  a 
few  men  working  on  a  building,  and  not  where  there  are  perhaps  two  or  three 
dozen  men.  The  superintendents  in  those  eases  are  more  than  efficient.  These 
men  I  am  speaking  of  get  four  or  five  cents  an  hour  more  than  the  workmen  with 
whom  they  are  working,  that  is  all. 

Mr.  Dempster:  Your  whole  argument  leads  to  where  Mr.  Doggett  has  placed 
it.  We  need  intelligent  workmen  so  that  they  get  more  of  what  they  produce 
instead  of  half  of  it  going  to  the  superintendent. 

Mr.  Dillon:  AVe  had  one  very  had  accident  where  we  had  a  really  good 
superintendent,  and  we  still  have  him.  He  can't  watch  everything.  This  man  fell 
and  broke  his  hack  and  we  were  sued  under  the  common  law  for  $5,000.  Sir 
William  Mulock  was  the  judge  and  he  gave  them  $1,500.  The  insurance  company 
defended  the  suit,  hut  they  failed,  and  we  were  let  in  for  $500  besides  that.  This 
was  under  a  superintendent.  I  don't  know  whose  fault  it  was  for  it  was  hard  to 
get  evidence  to  prove  whose  fault  it  was,  hut  it  was  a  very  had  accident.  It,  I 
suppose,  cost  us  $2,000  which  was  more  than  we  got  out  of  the  insurance  company. 
The  doctor's  hill  alone  was  $600.  There  seems  to  be  no  law  that  they  can  col- 
lect off  you  for  doctor's  bills,  and  the  insurance  companies  very  often  won't  pay 
that  doctor's  hill,  and  other  expenses. 

The  Commissioner:    What  rate  is  paid  in  the  building  trade  for  insurance? 

Mr.  Dillon  :  I  think  inside  we  pay  40  cents  on  the  thousand.  Outside  we 
pay  $2. 

The  Commissioner:     It  is  not  done  on  the  pay-roll? 

Mr.  Dillon  :  Yes,  but  it  is  separated.  Outside  work  is  more  hazardous  than 
inside.     The  outside  costs  us  $2  or  $2.25  a  thousand,  or  something  like  that. 

The  Commissioner:  That  is  very  much  in  excess  of  what  it  is  under  the 
the  Washington  law. 

Mr.  Bancroft  :    The  Washington  law  is  .035  inside.    It  is  less  outside. 

The  Commissioner:  Somebody  was  figuring  up  and,  assuming  that  the 
Toronto  Railway  wage  bill  was  $1,000,000,  all  it  would  pay  under  this  act  would 
be  $365. 

Mr.  Wegenast:  No,  your  Lordship,  I  think  it  would  he  $3,650. 

The  Commissioner:    It  is  very  hard  to  understand  it. 

Mr.  Wegenast:  I  went  into  that  thoroughly  with  the  Commissioner  over 
there. 

The  Commissioner  :    A  professor  of  mathematics  makes  it  a  different  figure. 

Mr.  Wegenast:  The  figure  that  one  would  gather  from  the  actual  reading 
must  be  multiplied  by  ten. 

The  Commissioner:    That  would  be  $3,650.    It  is  40  cents  inside? 

Mr.  Dillon  :    I  think  that  is  what  it  is.    I  could  get  it  for  you. 

Mr.  Wegenast  :  In  this  particular  case,  Mr.  Dillon,  how  much  of  the  money 
which  was  paid  out  either  by  you  or  the  insurance  company  actually  reached  the 
injured  workman? 

The  Commissioner  :    He  can't  tell.    Ask  the  lawyer. 

Mr.  Dillon:  We  paid  $1,500  to  the  workman,  and  through  a  suggestion  of 
Sir  William  Mulock's  we  paid  him  $5  a  week,  and  paid  his  hospital  expenses. 
Then  he  had  several  bills  to  the  lawyers  and  different  ones,  and  I  don't  think  he 
got  more  than  $500  or  $700  out  of  that.  We  paid  the  court  costs  which  were  $300 
and  something. 


22?  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Wegenast  :  Were  you  insured  in  the  ordinary  form  of  employers' 
liability  insurance? 

Mb.  Dillon  :    In  the  Ontario  Accident. 

The  Commissioner  :  You  were  worse  off  in  that  case  where  you  had  a  super- 
intendent ? 

Me.  Dillon  :    He  is  a  first-class  superintendent. 

The  Commissioner  :  If  the  three  men  had  been  working  together  then  there 
would  have  been  no  liability  under  the  present  law,  if  it  was  the  fault  of  one  of 
them. 

Mr.  Miller:  Supposing  the  workman  was  working  on  one  building  when 
you  insured  him  and  you  moved  him  to  another  building,  would  you  be  compelled 
to  reinsure  him?  Would  your  insurance  be  null  and  void  if  you  took  your  work- 
men from  one  place  and  put  them  on  another  where  there  was  another  contract? 

Me.  Dillon  :  Oh  no,  we  are  taxed  on  the  pay-roll.  We  have  to  keep  a  sepa- 
rate pay-roll  for  the  inside  and  the  outside  men. 

The  Commissioner:  It  is  a  blanket  insurance  on  your  men  when  they  are 
working  outside  ? 

Mr.  Dillon:    Oh,  yes. 

Mr.  Wegenast:  May  I  ask  Mr.  Dillon  a  question:  How  far  does  that 
blanket  insurance  reach?  Supposing  it  was  an  accident  in  which  ten  thousand  dol- 
lars damage  was  done,  does  your  policy  protect  you,  or  would  it  only  protect  you 
up  to  five  thousand  dollars? 

Mr.  Dillon  :  I  think  it  protects  us  up  to  $5,000.  I  am  not  just  sure  about 
that. 

Mr.  Wegenast  :  In  order  to  get  a  larger  measure  of  protection  you  must  pay 
a  considerably  higher  rate? 

Mr.  Dillon:     I  don't  know  about  that,  I  am  sure. 

The  Commissioner  :  I  was  thinking  of  having  somebody  from  one  of  these 
insurance  companies  here  probably  Friday  night  to  explain  how  that  works. 

Mr.  Bancroft  :  I  would  like  to  ask  Mr.  Dillon  if  he  would  have  any  objection 
to  compulsory  insurance  if  it  covered  all  employers,  similar  to  private  insurance? 
If  it  would  not  cost  any  more  would  you  have  any  objection  to  State  insurance? 

Mr.  Dillon  :  No,  we  have  no  objection  to  State  insurance.  I  myself  am  in 
favour  of  tnat.  We  don't  care  who  we  pay  the  money  to,  and  we  would  be  better 
protected  under  the  State  than  under  the  insurance  companies. 

Mr.  Wegenast:  Supposing  the  contributions  were  called  insurance  premiums 
and  paid  to  the  State  Insurance  Department  on  a  basis  similar  to  what  you  pay 
now  to  the  insurance  companies,  but  be  compelled  to  pay  that  rate? 

Mr.  Dillon:  We  are  almost  compelled  now  to  pay  it  to  protect  ourselves. 
I  don't  think  it  would  be  sound  business  to  carry  it  along  unless  we  had  some 
insurance.  I  know  some  firms  have  a  protection  of  their  own.  They  put  away  a 
certain  sum  of  money,  and  they  claim  that  is  cheaper  than  insurance. 

Mr.  Wegenast:  Would  there  be  any  widespread  objection  to  that  form  of 
insurance,  to  the  Provincial  Government  saying  to  each  employer  in  the  building 
trade,  or  whatever  the  trade  might  he,  you  must  pay  every  year  instead  of  your 
accident  insurance  your  liability  insurance  rate,  you  must  pay  a  premium  rate 
of  so  much  lo  the  Government  and  we  will  protect  you  from  liability  for  injuries 
to  your  workmen  ? 

Mr.  Dillon:  I  don't  think  so.  The  only  protection  we  get  under  the  insur- 
ance now  is  they  protect  us  in  the  case  of  a  law  suit.  It  is  very  unfair,  I  think, 
that  way.     They  protect  us  against  the  case  of  a  law  suit,  and  very  often  they 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  323 

won't  give  a  man  anything  unless  he  does  go  to  law.  That  is  the  only  protection 
we  have  from  the  insurance  companies.  Of  course  they  will  pay  up  to  $1,500  for 
one  accident.  1  would  like  to  see  some  law  where  we  could  get  away  without  a  law 
suit,  so  that  the  man  that  is  hurt  wouldn't  have  to  prove  anything.  Let  some  arbi- 
tration board  or  somebody  prove  that  for  him,  so  that  he  doesn't  have  to  get 
lawyers  to  prove  it. 

Mi;.  Wegexast ;  You  have  your  men  insured.  You  are  not  compelled  to 
insure,  but  in  your  private  insurance  which  you  carry  there  is  a  large  measure  of 
waste  as  between  you  and  the  workman?  The  money  which  you  pay  out  does  not 
actually  go  to  the  workman  ? 

Me.  Dillon  :    Yes,  that  is  it. 

The  Commissioner:  Did  you  ascertain,  Mr.  Wegenast,  in  your  enquiries 
about  this  Washington  law,  how  they  hope  that  these  rates  which  are  lower  than 
the  rates  of  insurance  companies  can  provide  a  fund  sufficient  to  pay  for  the  losses, 
when  the  region  of  accidents  is  so  much  extended  as  it  is  under  the  Washington 
Act?  That  is  to  insure  in  the  way  in  which  the  State  insures,  when  these  com- 
panies require  double  the  premiums  that  they  get  now,  or  more  than  that? 

Mr.  Wegenast  :    My  information  is  that  the  rates  are  not  higher. 

The  Commissioner:    Which? 

Mr.  Wegenast  :  That  the  rates  under  the  Washington  Act  are  the  fair  rates 
under  such  an  act  as  in  Manitoba  and  Alberta  and  Quebec.  I  have  talked  the 
matter  over  with  a  number  of  managers  of  the  liability  companies  and  they  say 
these  rates  are  fair  average  rates. 

The  Commissioner:  It  can't  be  so  if  Mr.  Dillon's  information  is  accurate, 
because  they  are  higher  than  40  cents. 

Mi;.  Wixjenast:  I  think  the  rate  in  the  Washington  Act  is  in  the  neighbor- 
hood of  3!/2  per  cent,  on  the  pay  roll. 

The  Commissioner:     That  is  35  cents.     The  act  does  not  read  that  way. 

Mr.  Bancroft  :  I  think  if  you  take  outside  structural  work  .065,  if  you 
multiply  that  by  ten  and  say  $65  a  thousand,  you  get  at  the  rate. 

Mr.  Wegenast:     10  per  cent,  on  the1  pay-roll. 

The  Commissioner  :     That  would  put  some  men  out  of  business. 

Mr.  Wegenast:  Of  course  I  am  not  advocating  anything,  but  that  has  not 
been  the  experience. 

The  Commissioner:  They  told  me  at  Cobalt  that  the  insurance  company 
charges  them  2  per  cent.,  I  think. 

Mr.  Wegenast:     That  is  only  to  carry  the  legal  liability. 

Mr.  Bancroft:  If  you  take  .065  and  multiply  that  by  10  and  say  it  is  $65 
on  the  thousand  instead  of  65  cents,  that  would  be  enormous. 

The  Commissioner:     That  is  $6.50  on  the  thousand? 

Mr.  Bancroft  :    Yes,  that  is  better. 

The  Commissioner:  I  can  get  insurance  in  an  accident  company  for  $5  a 
thousand.     I  can't  now,  for  I  am  past  the  age,  but  I  did  carry  it  for  a  time. 

Mr.  Wegenast  :  That  is  only  against  a  limited  number  of  accidents.  I  don't 
know  what  the  basis  of  comparison  would  be. 

The  Commissioner  :     It  covers  some  diseases  as  well. 

Mr.  Wegenast  :  Of  course  the  intention  under  that  Act  was  explained  to  me 
by  those  who  were  instrumental  in  having  it  passed  and  those  who  were  at  present 
administering  it  that  the  rates  would  be  subject  to  adjustment,  and  that  the 
insurance  will  cost  exactly  what  it  costs. 

Mr.  Gibbons:     Your  Lordship's  occupation  is  not  as  hazardous  as  some. 


224  MINUTES  OF  EVIDENCE:  No.  65 

The  Commissioner  :  No,  it  would  be  higher  no  doubt  for  a  brakeman  on  a 
railroad. 

Mr.  Wegenast  :  There  is  power  under  the  Washington  Act  itself  to  adjust 
the  rate.  I  may  say  this  has  been  done  now.  The  lumber  manufacturers  found 
that  their  rate  was  somewhat  higher  than  the  rate  which  they  had  been  levying  in 
a  mutual  society  of  their  own,  and  under  which  they  had  worked  out  a  scheme  of 
compensation.  They  secured  the  consent  of  the  State  Department  to  carry  their 
risk  at  their  former  rate,  I  think,  without  setting  aside  a  capitalized  amount  to 
meet  future  payments;  simply  paying  the  annual  payments  which  were  due  under 
the  schedule  of  the  Act,  without  setting  aside  the  capital  amount  to  meet  each  pay- 
ment, and  in  that  way  they  reduced  their  rates. 

The  Commissioner  :  I  don't  understand  what  that  means,  as  to  setting  aside 
an  amount? 

Mr.  Wegenast  :  The  capitalized  value  of  a  capital  injury  if  one  may  so  call 
it.  In  the  case  of  death  it  is  $4,000,  and  when  an  accident  occurs  the  sum  of  $4,000 
is  set  aside  during  the  year  that  the  accident  happened  to  meet,  all  further  payment. 

The  Commissioner  :     Set  aside  by  them  ? 

Mr.  Wegenast:  The  Insurance  Department.  The  Insurance  Department 
that  year  levies  a  sufficient  amount  to  set  aside  $4,000  for  each  case  that  has  arisen. 

The  Commissioner:     On  the  particular  establishment  or  manufacturer ? 

Mr.  Wegenast:     On  all  the  industries  in  that  class. 

The  Commissioner:  I  do  not  so  understand  this  act.  Do  you  mean  to  say 
in  addition  to  paying  this  rate  upon  the  wage-bill  they  also  pay  for  every  accident? 

Mr.  Wegenast  :  When  a  man  is  killed  an  application  is  made  for  compensa- 
tion. The  sum  of  $4,000  is  set  aside  out  of  the  general  fund  to  meet  that,  and 
that  $4,000  is  assessed  upon  the  employers  that  year. 

The  Commissioner:     Why  should  that  be?     They  have  paid  the  premium. 

Mr.  Wegenast:  It  is  a  matter  of  book-keeping.  The  sum  of  $4,000  is  set 
aside,  and  that  $4,000  is  levied  that  year.  Now,  these  lumber  manufacturers  ob- 
tained in  this  case,  instead  of  setting  aside  that  $4,000  for  that  year  they  would 
simply  pay  the  pensions  under  the  act,  which  were  due  for  that  year,  amounting 
to  about  $240,  or  $20  a  month  for  12  months,  so  that  that  year's  assessment  would 
be  $240  instead  of  $4,000. 

The  Commissioner:     I  do  not  see  anything  like  that  in  this  act. 

Mr.  Wegenast:     The  provision  is  there. 

The  Commissioner:     The  man  is  paying  twice  over,  according  to  that. 

Mr.  Wegenast  :  No,  that  is  the  assessment  for  the  year,  and  there  is  only 
one  assessment. 

The  Commissioner:  On  the  1st  of  October  or  the  11th,  whatever  the  date  is, 
I  pay  my  cheque,  the  percentage  on  the  pay-roll,  and  surely  that  ought  to  proted 
me  against  any  accident,  whether  fatal  or  otherwise,  during  the  year. 

Mr.  Wegenast  :  Yes,  but  the  premium  is  based  on  a  capitalization  of  the 
injury  instead  of  being  based  upon  simply  the  annual  payment.  All  the  employers 
in  the  States  must  pay  a  rate  to  set  aside  $4,000  for  each  injury  that  arises  for 
that  year,  and  the  rate  is  based  on  the  assumption  that  that  $4,000  will  be  set 
aside  for  the  purpose.  Where  it  set  aside  only  $240  the  rate  of  course  would  be 
very  much  lower. 

The  Commissioner:     I  do  not  see  anything  like  thai  in  the  act. 

Mr.  Miller  :  Wouldn't  that  have  the  effect,  Mr.  Wegenast,  of  making  the 
insurance  much  more  expensive  in  the  experimental  stage  than  it  would  later  on? 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  225 

Me.  Wegenast:  The  insurance  rate  would  gradually  rise  as  the  number 
of  dependants  increased,  until  such  time  as  the  older  ones  dropping  off  reached 
the  same  rate  as  the  new  ones  coming  on. 

The  Commissioner:  If  they  are  taking  the  place  of  an  insurance  company 
and  paying  the  premium,  I  don't  see  why  that  doesn't  pay. 

Mr.  Bancroft:  I  thought  the  definition  of  that  was,  when  an  employer  has 
paid  his  tax  he  has  paid  his  yearly  contribution,  and  that  goes  into  the  Revenue 
Department  of  the  State  Insurance,  and  if  there  is  an  accident  happens  that  year 
and  it  is  a  permanent  injury,  according  to  the  mortuary  tables  of  the  United 
States  $4,000  is  the  amount  that  is  set  against  the  permanent  injury,  and  they 
set  $4,000  against  that  injury,  and  say  $20  a  month  for  a  year  is  $240,  and  five 
times  that  would  be  $1,200.  You  see  that  would  go  15  years,  which  is  the  estimated 
life  of  the  person  that  was  injured.  It  is  to  set  aside  that  amount  for  the  purpose 
of  guaranteeing  the  compensation  as  long  as  the  person  lived. 

Mr.  Miller:     That  is  the  idea. 

Mr.  Wegenast:     I  will  deal  with  that  in  the  brief  that  I  expect  to  submit. 

The  Commissioner:    Very  well. 

Mr.  Bancroft:  They  set  it  aside  to  cover  the  compensation,  according  to 
the  mortuary  life  tables  of  the  United  States. 

Mr.  Wegenast:  I  was  under  the  impression  that  that  amount  was  set  aside. 
I  haven't  been  able  to  lay  my  eyes  on  the  section,  but  I  am  still  under  that  im- 
pression. 

The  Commissioner:  You  see  in  that  way  the  State  ought  to  make  a  lot 
of  money.  This  table  is  based  upon  the  idea  that  it  will  pay  for  all  the  accidents, 
and  if  they  get  that  besides  that  will  be  in  addition. 

Mr.  Wegenast  :  It  is  not  besides'  that.  That  rate  is  fixed  on  the  assump- 
tion that  it  will  be  necessary  to  set  aside  that  amount  as  a  reserve  to  meet  future 
payments,  but  if  the  act  were  framed  in  such  a  way  that  each  year  it  would  take 
care  of  that  year's  pensions  or  periodical  payments,  then  the  initial  rate  at  all 
events  would  be  much  less.  There  is  another  provision  in  case  of  .death  or  total 
disability,  the  monthly  payment  provided  may  be  converted  in  whole  or  in  part 
into  a  lump  sum  payment,  not  in  any  case  to  exceed  $4,000,  on  the  theory,  accord- 
ing to  the  expediency  of  life,  and  so  on,  and  that  a  monthly  payment  of  $20  to 
a  person  thirty  years  of  age  is  worth  $4,000.  The  rate  is  worked  out  on  a  capital- 
ized basis,  the  injury  being  capitalized,  and  a  sufficient  amount  being  set  aside 
that  will  take  care  of  it  for  the  future.  That  is  not  the  way  the  German  system 
is  worked  out.  The  German  system  started  in  with  the  idea  of  paying  only  the 
year's  pension  and  these  pensions  would  gradually  rise  for  a  period  of  about  30 
years,  when  they  would  reach  the  normal  rate. 

Mr.  Bancroft:  Before  we  close,  I  would  like  to  say  that  the  case  we  have 
presented  we  have  built  up  on  the  best  evidence  we  could  procure.  I  believe  the 
Friday  night  meeting  would  be  better  for  labour  in  general  to  get  here. 

The  Commissioner:  There  will  be  a  meeting  on  Friday  at  eight  o'clock, 
and  I  think  I  will  ask  Mr.  Neely,  of  the  Ocean  Accident  Company,  to  be  here  to 
explain  how  that  insurance  works. 

Mr.  Bancroft  :  If  there  is  anything  we  can  provide  in  the  way  of  informa- 
tion we  will  be  glad  to  furnish  it. 


15  L. 


226  MINUTES  OF  EVIDENCE:  No.  65 


FIFTH  SITTING. 


Legislative  Building,  Toronto. 

Friday,  29  th  December,  1911,  S  p.m. 

Present:     Sir  William  E.  Meredith,  Commissioner.: 
Mr.  F.  N.  Kennin,  Secretary. 
Me.  W.  B.  Wilkinson,  Law  Clerk. 

The  Commissioner:  Are  there  any  of  the  farming  community  here,  or 
anybody  who  would  like  to  speak  on  their  behalf? 

The  Secretary:     I  notice  Mr.  Waldron  here. 

The  Commissioner  :  The  proposition  is  by  those  who  represent  the  employees 
that  this  act  should  be  like  the  British  Act,  applicable  to  farmers,  and  also  to 
domestic  servants.  The  British  Act  as  introduced  by  Mr.  Gladstone  accepted 
that,  and  it  was  apparently  struck  out  while  in  the  House  of  Commons.  Have  you 
any  view  upon  that  subject,  Mr.  Waldron? 

Mr.  Waldron  :  Well,  I  came  rather  to  learn  than  to  express  any  views  of  my 
own.  I  have  been  looking  into  the  matter.  I  started  in  with  the  lawyer's  assump- 
tion that  we  were  getting  on  very  well  by  progressive  decisions  fixing  the  law. 
Later,  however,  I  looked  up  some  reports  published  by  the  International  Committee 
in  Eome  giving  a  synopsis  of  the  legislation  in  various  countries  in  Europe  on  this 
question  as  affecting  farmers,  and  I  was  surprised  to  see  how  far  it  had  gone.  They 
have  gone  step  by  step,  irresistibly  apparently,  and  it  appeared  to  me  that  it  was 
a  very  serious  question  for  this  Province.  There  is  first  the  question  whether  the 
farmers  will  be  disposed  to  entertain  legislation  of  this  kind  favourably,  and  as  to 
that  I  can  only  express  my  own  opinion.  I  should  think  they  would  be  jealous  of 
it.  I  should  think  when  the  matter  was  discussed  they  would  regard  the  proposals 
made  by  these  gentlemen,  which  I  have  seen  in  the  daily  press,  as  class  legislation, 
as  indeed  it  appears  to  me  to  be.  It  appears  to  me  that  the  manufacturers  are 
seeking  to  distribute  evenly  over  the  community  a  burden  which  sometimes  sits 
heavily  upon  individuals,  and  that  the  labourers  are  seeking  to  secure  more  certain 
compensation  and  more  compensation  than  they  are  getting  now.  I  should  think 
it  would  appear  to  the  farmer  when  he  thinks  the  matter  out  that  the  burden  both 
of  compensation  to  himself  and  compensation  to  his  own  labourers  would  fall  wholly 
upon  him,  and  may  have  important  economical  results.  It  may  tend  perhaps  to 
increase  the  difficulties  of  the  farm  labourer.  It  is  likely  to  be  followed,  logically 
followed,  by  sickness  and  old  age  insurance,  which  would  appear  to  rest  on  the  same 
grounds  or  sentiments,  and  thus  it  might  intensify  the  movement  of  labourers  from 
the  land  to  the  town,  which  is  now  becoming  in  my  view  the  most  serious  public 
question  that  we  have.  Perhaps  we  exaggerate  sometimes,  it  appears  to  me,  the 
grievances  of  labour.  Labour  and  capital  seem  to  think  they  occupy  the  whole  field, 
and  that  there  are  no  other  interests  in  the  country  but  theirs.  But  there  is  the 
producer  on  whom  they  shift  their  burdens  and  whose  profits  they  continually 
struggle  to  acquire  and  divide  as  unequally  as  they  can.  We  are  doing  in  an 
unorganized  way  something  along  the  same  line.  We  have  our  institutions  of 
charity  and  of  relief,  to  which  municipalities  and  individuals,  and  governments 
contribute,  and  so  we  take  care  of  the  unfortunate.     We  are  relieving  them  now 


1912  WORKMEN'S  COM  P KXSATION  COMMISSION.  227 

perhaps  to  a  large  extent  by  such  legislation,  but  we  may  in  the  working  out  of  these 
things  economically  and  socially  merely  create  other  social  difficulties.  However, 
about  that  I  speak  with  great  modesty  because  it  would  need  a  very  close  study  such 
as  might  be  facilitated  by  the  report  you  will  make,  sir,  to  lead  one  to  just  con- 
clusions. However,  I  should  fancy  the  farmer  would  regard  the  whole  thing  with 
suspicion  and  jealousy,  and  not  without  just  cause.  If  he  is  well  informed  and  if 
he  has  good  journalists  to  advise  him  as  to  the  reasons.  However,  I  am  greatly 
interested  myself  in  the  investigation,  and  I  only  regret  that  I  don't  know  more 
about  it.  It  must  be  manifest  to  everyone  that  the  grievances  of  #he  labourer  who  is 
injured  in  his  employment  are  but  a  very  very  small  portion  of  the  griefs  and  woes 
of  society,  that  appeal  to  all  reasonable  sentiment  and  fine  feelinged  men,  and  if 
we  mend  one  wc  must  undertake  the  mending  of  others.  The  lawyer  who  works, 
as  these  gentlemen  use  the  phrase,  with  all  the  risks  of  employment,  takes  typhoid 
fever  and  dies,  leaving  a  wife  and  little  children,  is  entitled  to  be  compensated  by 
society  when  it  is  put,  as  it  appears  to  be  put  here,  upon  mere  grounds  of  fine  feeling 
and  sentiment;  because  the  law  puts  it  on  the  grounds  of  the  duty  of  one  man  to 
another,  and  of  negligence,  and  the  like.  I  have  no  doubt  you  have  had  brought 
to  your  attention  the  laws  in  the  various  European  countries. 

The  Commissioner  :     A  great  many  of  them. 

Mr.  Waldron  :  I  came  across  a  little  bulletin  by  the  Bureau  of  Economical 
and  Social  Intelligence,  and  I  have  three  volumes  here  which  contain  information 
on  this  point.     It  is  published  in  Borne  in  three  languages. 

I  would  be  much  interested  to  know  what  the  view  of  the  labourers  is  as  to  the 
scale  of  compensation  ?     I  have  not  seen  in  the  press  anything  as  to  that. 

The  Commissioner  :  What  they  have  stated  is  that  the  scale  of  compensation 
in  England  is  too  low,  and  they  suggest  that  the  scale  should  be  raised  here  in 
proportion  to  the  difference  between  the  rate  of  wage  here  and  in  England.  They 
have  offered  to  submit  figures  of  that  at  a  later  stage.  They  have  submitted  none 
up  to  the  present. 

Mr.  Waldron:  I  thought  that  was  the  crux  of  the  question  probably.  I 
see  in  one  of  these  volumes  in  France  an  agricultural  labourer  receives  in  the  case 
of  death,  or  his  representatives  receive  in  the  case  of  death,  2,000  francs  for  an 
adult  male,  and  1,000  francs  for  an  adult  female.  They  classify  compensation 
into  death  and  total  incapacity,  or  absolute  incapacity,  and  two  other  degrees  of 
incapacity.  There  does  not  seem  to  be  any  provision  for  the  sprained  back  and 
pain  and  suffering  cases  such  as  we  have  before  our  courts  here,  where  men  suffer 
minor  injuries  leaving  no  permanent  injury.  The  compensation  in  Italy  and 
Germany  and  Belgium  appears  to  be  small  compared  with  what  I  thought  labourers 
could  ask  for  here. 

The  Commissioner  :  Assuming  you  start  with  the  proposition  that  the  risks 
that  an  employee  is  under  in  his  employment  should  be  compensated  for  when  they 
result  in  accidents,  by  his  employer,  how  logically  could  you  distinguish  in  the  class 
of  employer  without  making  it  class  legislation?  If  a  carpenter  employing  two 
men  and  one  of  his  men  is  injured  must  pay,  why  must  not  the  farmer  pay  if  he 
has  two  men  and  one  of  them  is  injured  ?     I  am  putting  it  logically  ? 

Mr.  Waldron  :     Oh,  I  don't  see  any  logical  difference. 

The  Commissioner  :  It  struck  me  the  only  thing  that  could  be  said  was  that 
practically  in  this  country  we  had  no  farming  on  a  large  scale  with  machinery  and 
that  sort  of  thing.  Most  of  the  farmers  in  this  country  employ  not  more  than  one- 
man,  or  sometimes  two. 


228  MINUTES  OF  EVIDENCE:  No,  65 

Mr.  Waldron:     In  most  cases  none  at  all. 

The  Commissioner  :  Well,  of  course  he  is  then  in  no  trouble.  The  risks  of 
that  employment  are  not  at  all  as  great  as  in  industrial  employments,  such  as 
manufacturing. 

Mr.  Waldron  :  Somebody  made  the  statement  here  in  a  recent  meeting  that 
insurance  companies  say  the  risks  are  greater  on  the  farm,  and  on  reflection  t 
thought  that  was  probably  true.  I  looked  at  the  report  of  the  statistical  regis- 
tration of  births  and  deaths,  and  there  are  264  men  die  from  accident  on  the  farm 
as  compared  with  only  459  in  the  whole  Province. 

The  Commissioner:  The  farming  community  are  very  much  larger 
numerically. 

Mr.  Waldron:  No,  the  farming  population  has  fallen  very  much  below  the 
urban  population. 

The  Commissioner:     I  didn't  think  that  was  so. 

Mr.  Waldron  :  Oh  yes,  that  is  so.  The  percentage  is  about  40  to  60,  I  think. 
That  is  what  is  pointed  out  by  those  who  have  studied  the  matter.  That  can  be 
readily  verified. 

The  Commissioner:  In  the  case  of  a  farmer  employing  one  man  of  course 
no  question  of  common  employment  could  arise,  and  even  if  he  had  two  generally 
the  farmer  himself  is  taking  part  in  the  operation,  and  if  an  accident  happened 
he  probably  would  be  responsible  at  common  law. 

Mr.  Waldron:  I  speak  with  diffidence  about  that.  The  farm  labourer  has 
not  the  benefit  of  the  legislation. 

The  Commissioner  :  But  supposing  a  farm  labourer  is  injured  by  machinery 
that  is  supplied  by  the  farmer,  then  it  would  be  almost  a  clear  case  of  common  law 
liability. 

Mr.  Waldron:  Yes.  In  those  foreign  countries  I  see  they  introduce  the 
farm  labourer  benefits.  They  applied  it  first,  I  think,  in  France  to  labourers 
employed  on  the  farm  in  working  farm  machines  propelled  by  power.  Then  in  a 
subsequent  act  it  is  extended  to  labourers   engaged  in  forests,   and  so  on.       It 

gradually  creeps  in. 

The  Commissioner:  If  this  thing  were  being  discussed  in  the  House  by 
those  who  represent  farming  communities  I  fancy  they  would  not  IodIc  up  Da  it 
favourably.  In  a  discussion  a  case  like  this  was  put :  A  farm  labourer  is  working 
about  the  stable  and  a  horse  kicks  him  and  kills  him;  nobody  is  at  fault,  and 
nobody  knew  about  it.  Under  the  British  Act  there  was  compensation  to  be  paid. 
That  would  probably  mean  ruin  to  that  farmer. 

Mr.  Waldron:  Exactly.  You  must  bear  in  mind  the  farmer's  economic 
condition.  If  you  cut  out  the  mere  legal  bearing  of  being  an  employer  and  owning 
land,  in  the  great  majority  of  cases  he  is  in  the  same  class  as  the  labourer,  econom- 
ically, and  he  can  bear  no  additional  burden.  He  has  no  power  to  add  the  cost  of 
compensation  to  his  prices,  because  his  prices  are  made  in  the  world's  competition, 
and  therefore  he  is  jealous  about  anything  that  imposes  a  further  burden  upon  him. 

The  Commissioner  :  Your  arguments  meet  with  those  of  the  mining  people. 
They  claim  that  they  ought  not  to  be  in  the  same  position  as  the  manufacturer 
because  the  world  governs  the  price  of  silver,  and  they  cannot  raise  it. 

Mr.  Waldron:  It  is  unquestionably  a  strong  argument.  The  manufacturer 
is  in  a  happy  position,  for  he  has  a  high  tariff  in  this  country. 

The  Commissioner:  I  thought  you  thought  that  was  the  worst  thing  that 
could  happen,  that  they  would  be  better  off  in  an  open  market? 

Mr.  Waldron:     I  didn't  think  it  was  the  worst  thing  for  the  manufacturer, 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  229 

but  ultimately  it  would  be  the  worst  thing.  But  'he  is  in  a  happy  position  when  the 
demand  is  rapidly  increasing  with  the  incoming  dwellers.  He  can  name  his  own 
prices  within  the  limit  of  the  tariff  advantage.     The  farmer  has  no  such  advantage. 

Mr.  Kingston:  Is  there  not  this  rather  serious  difficulty  which  will  confront 
you  in  any  proposed  legislation  of  this  class  for  the  farmer  ?  Probably,  for  example, 
we  will  pay  half  the  farmers  do  not  employ  labour  at  all.  Supposing  the  proposed 
State  compulsory  insurance  were  introduced  and  it  were  made  to  apply  to  the 
farmers,  it  would  probably  make  all  these  farmers  contribute  according  to  the 
schedule  adopted  in  the  act. 

The  Commissioner  :     It  would  be  only  those  employing  labour. 

Mr.  Waldron  :  In  France  or  Italy  it  says  it  does  not  apply  to  the  farmers 
who  employ  less  than  three  men,  I  see,  in  one  case. 

Mr.  Kingston  :  Some  such  provision  would  require  to  be  made  because  a 
great  many  farmers  only  employ  a  man,  when  they  do  employ  labour,  for  a  few 
months  in  the  year.     The  most  of  them  get  along  with  themselves  and  their  sons. 

The  Commissioner:  I  fancy  the  principal  difficulty  would  not  be  with  the 
Commission,  hut  in  the  House.  I  doubt  very  much  that  any  proposition  to  bring 
the  farmers  under  this  act  would  meet  with  approval.  I  recollect  when  the  original 
act  was  introduced  which  excludes  agricultural  labourers  and  domestic  servants, 
there  were  very  strong  arguments  all  over  the  House  against  bringing  them  in, 
and  some  very  peculiar  arguments  were  adduced. 

Mr.  Waldron:     I  feel  quite  sure  about  it. 

The  Commissioner  :  However,  we  will  have  to  propose  what  is  right  and 
let  the  legislature  do  what  they  think  best. 

Mr.  Kingston:  There  has  been  no  demand  from  the  farmer  or  the  farm 
labourer  for  this  legislation. 

The  Commissioner:  There  is  Mr.  Bancroft,  and  Mr.  Doggett,  and  Mr. 
Meredith. 

Mr.  Meredith  :  I  don't  represent  the  farmers,  but  I  thought  when  it  comes 
up  in  the  House  that  the  farmers'  representatives  would  be  more  liable  to  pass  the 
act  than  they  would  be  if  they  weren't  included  in  it.  I  don't  know  whether  Mr. 
Waldron  meant  that  the  farmers  who  do  not  have  more  than  two  or  three  working 
men  would  not  have  to  pay  towards  this  legislation,  or  whether  they  would  not 
get  the  benefit  of  it? 

The  Commissioner:  I  think  you  will  find  it  is  not  the  farmers,  but  the 
men  who  want  to  bring  the  farmers  in  are  the  manufacturers. 

Mr.  Waldron  :     That  is  how  it  appears. 

The  Commissioner:  If  they  could  bring  them  in  of  course  they  would  get 
a  much  easier  measure. 

Mr.  Kingston  :  I  would  take  it  that  that  would  hardly  be  so,  because  if  you 
are  going  to  prepare  a  schedule  you  have  got  to  prepare  a  farmer's  schedule  and  a 
manufacturer's  schedule. 

The  Commissioner:     The  farmer  helieves  in  keeping  things  down  all  round. 

Mr.  Kingston  :  If  you  take  the  Washington  Act  as  a  basis  you  would  simply 
add  another  schedule  to  the  act. 

The  Commissioner:  I  do  not  think  you  understand  the  farmers  quite  as 
well  as  I  do,  or  the  farmers'  representatives. 

Mr.  Kingston  :     I  lived  there  for  some  years. 

The  Commissioner:  I  think  Mr.  Wegenast,  if  he  was  at  confession,  would 
tell  us.     I  don't  want  him  to  confess. 

Mr.  Wegenast:     I  am  not  going  to  confess,  but  I  expect  to  have  a  state- 


230  MINUTES  OF  EVIDENCE:  No.  65 

ment  here  in  a  few  minutes,  if  the  time  is  opportune  to  give  a  statement,  which  I 
made  before  the  Bar  Association. 

The  Commissioner:  I  see  Mr.  Neely  here,  and  we  wanted  to  get  a  little 
information  from  him  on  the  subject  of  accident  insurance. 

Where  a  manufacturer  insures  his  employees  upon  what  is  the  rate  based? 
Has  it  any  regard  to  the  wage-roll? 

Mr.  Neely  :     Yes,  it  is  based  upon  the  pay-roll. 

The  Commissioner:  The  average  pay-roll  of  the  year,  or  how  do  you  get 
at  it? 

Mr.  Neely:     The  total  pay-roll  for  the  year. 

The  Commissioner:     Have  you  seen  the  Washington  schedule? 

Mr.  Neely  :     I  don't  know  that  I  have,  sir. 

The  Commissioner  :  It  only  includes  hazardous  employments.  Mr.  Wege- 
nast,  you  said  that  that  .035  meant  what? 

Mr.  Wegenast  :  The  word  percentage  is  misleading.  The  word  fraction  or 
decimal  is  better.     It  is  .035  or  .065  of  the  pay-roll. 

Mr.  Waldron  :  In  Denmark  there  is  compulsory  insurance  for  all  agricul- 
tural labourers  not  exceeding  a  certain  amount.  In  Italy  only  the  agricultural 
labourer  with  machinery  and  the  forestry  workmen  are  included. 

The  Commissioner  :  Will  you  please  explain  what  you  learned  about  that, 
Mr.  Wegenast? 

Mr.  Wegenast  :  It  doesn't  make  any  difference  which  you  multiply  the  pay- 
roll by,  .065  or  &y2  per  cent. 

The  Commissioner:  But  your  accident  rates  are  based  upon  accidents 
arising  from  the  negligence  of  the  employer  or  somebody  in  superintendence.  This 
is  much  wider,  covering  accidents  arising  from  any  cause. 

Mr.  Neely:     With  a  Compensation  Act? 

The  Commissioner:  Yes.  There  is  compensation  where  the  workman  in 
certain  cases  brings  the  injury  upon  himself.  What  is  your  experience  with  regard 
to  claims  that  are  made,  whether  there  are  many  that  are  exaggerated  or  many 
that  are  without  foundation? 

Mr.  Neely:     Under  Compensation  Acts? 

The  Commissioner:  Under  the  system  that  is  in  vogue  here  with  insurance 
companies? 

Mr.  Neely  :  Well,  we  deal  with  oases  in  Ontario  and  also  in  British  Columbia 
and  also  in  Alberta.  In  the  latter  two  Provinces  they  have  Compensation  Acts, 
where  in  Ontario  we  have  the  Employers  Liability  Act  only,  and  the  common 
law,  so  that  we  have  rates  varying  in  each  Province.  In  the  Compensation  Act 
Provinces  not  all  the  claims  are  made  under  the  Compensation  Act.  A  very  large 
proportion  is  still  made  at  common  law  and  for  negligence.  Generally  the  more 
serious  cases  are  made  at  common  law.  The  chief  reason  for  that  we  find  is  that 
there  is  a  speculative  chance  for  larger  sums,  and  the  act  gives  an  alternative  in  the 
event  of  failure.  It  encourages  speculation,  and  the  man  has  nothing  to  lose  by 
trying  at  common  law. 

TriE  Commissioner:     Can  he  make  an  alternative  claim? 

Mr.  Neely:  The  Provinces  are  somewhat  different,  hut  they  may  award 
compensation  under  the  act,  and  it  has  generally  been  done.  If  there  was  no 
such  alternative,  and  we  have  one  Province  where  it  does  not  exist,  Manitoba,  we 
find  a  great  many  more  claims  made  under  the  Compensation  Act,  and  there  is  less 
litigation  and  less  disputes,  of  all  kinds. 

The  Commissioner:     Well,  what  are  the  principal  difficulties  you  have  in 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  231 

dealing  with  claims?  Is  it  as  to  whether  an  accident  for  which  you  are  responsible 
has  happened,  or  whether  the  man  has  really  been  injured,  or  the  extent  of  his 
injuries  ? 

Mr.  Neely:  Well,  the  first  real  essential  with  us  is  to  know  that  the  man 
has  been  injured  in  the  occupation.  Then  it  becomes  solely  a  question  of  the 
amount  to  which  he  is  entitled.  In  dealing  under  the  Compensation  Acts  we  have 
very  little  difficulty  in  arriving  at  those  amounts,  but  in  dealing  with  a  case  at 
common  law  it  is  quite  different. 

The  Commissioner  :     Do  you  find  many  fraudulent  claims  made  ? 

Mr.  Neely:  If  you  mean  by  fraudulent  no  foundation  in  fact,  we  don't  have 
many  of  those. 

The  Commissioner:     Exaggerated  claims. 

Mr.  Neely  :     A  great  many. 

The  Commissioner:  Are  there  any  difficulties  in  the  way  of  getting  a 
prompt  enquiry  and  determination  as  to  the  extent  of  the  injury? 

Mr.  Neely:  We  do  not  find  that  very  difficult  in  the  larger  centres  where 
we  have  facilities  for  making  those  inquiries.  In  the  more  remote  sections  the 
reports  are  very  often  slow  in  arriving,  and  we  have  had  a  few  accidents  we  do  not 
understand,  and  delays  occur. 

The  Commissioner:  Is  the  British  Columbia  Act  modelled  on  somewhat 
the  same  lines  as  the  British  Act? 

Mr.  Neely:     Almost  entirely. 

The  Commissioner:  What  difference  is  there  in  the  rate  for  thaft  Province 
in  this  regard? 

Mr.  Neely  :  In  the  different  trades  it  varies  considerably,  but  I  should  say, 
speaking  generally,  perhaps  50  to  100  per  cent,  more,  there. 

The  Commissioner:  I  was  told  that  the  rate  among  the  miners  was  2  per 
cent,  on  the  pay  roll.  It  seemed  to  be  a  flat  rate  of  2  per  cent,  charged  on  all 
the  mines  at  Cobalt.  Mr.  Dillon  who  is  a  builder  here  and  contractor  says,  I 
think,  he  pays  $2.10  on  the  hundred  for  outside  employees.  That  is  carpenters 
working  at  outside  work,  on  scaffolds,  and  that  kind  of  thing.  It  is  much  less 
for  men  who  are  employed  in  the  shop. 

Mr.  Neely:  In  mines  in  Ontario  it  would  be  $2,  and  carpenters  it  would 
be  $1.50. 

The  Commissioner:     Whether  they  are  employed  indoors  or  out? 

Mr.  Neely:  No,  outdoors.  It  is  a  great  deal  less  indoors.  I  think  there 
are  very  few  that  insure  for  carpenters  employed  in  the  shop. 

The  Commissioner:     Are  your  rates  often  re-adjusted? 

Mr.  Neely  :     As  frequently  as  we  can  find  reason  for  it. 

The  Commissioner:     Do  you  often  find  reason? 

Mr.  Neely:     Oh  yes,  adjustments  are  going  on  constantly  in  certain  classes. 

The  Commissioner  :     Do  you  take  any  farmers'  risks  ? 

Mr.  Neely  :     No  sir,  they  don't  insure  so  far  as  I  know. 

Mr.  Waldron:     Why? 

The  Commissioner:  They  don't  want  to  insure  I  understand  Mr.  Neely 
to  say? 

Mr.  Neely:     I  don't  think  they  ever  have  insured  in  this  country. 

The  Commissioner:  In  British  Columbia  does  the  compensation  extend  to 
farm  labourers? 

Mr.  Neely:     I  think  not. 


232  MINUTES  OF  EVIDENCE:  No.  65 


Me.  Kingston:  That  is  eliminated  from  all  the  acts?  I  do  not  think  there 
is  any  act  in  the  Provinces  that  includes  farm  labourers. 

Mr.  Wegenast:  I  have  a  schedule  here,  Sir  William,  that  I  would  like  to 
put  before  Mr.  Neely,  with  your  permission? 

The  Commissioner  :  Certainly.  I  would  be  glad  if  any  one  who  is  interested 
here  would  ask  any  questions  of  Mr.  Neely. 

Mr.  Wegenast:  That  gives  the  rate  on  certain  industries  in  Quebec  and 
in  British  Columbia  before  and  after  the  passing  of  the  liability  law. 

The  Commissioner:  According  to  this  in  1907,  under  the  Employers'  Lia- 
bility law,  bakers  and  biscuit  factories  were  seven  and  a  half  to  twelve  and  a 
half  cents.     In  1908  under  the  Compensation  Act  it  is  $1.121/£. 

Mr.  Wegenast  :    Yes. 

The  Commissioner:  Bakers  and  biscuit  factories  under  liability  law  17 
cents;  British  Columbia  under  Workmen's  Compensation  89  cents;  Quebec  $1.37. 
Brick-making  42  cerfts  under  liability  law;  $1.26  in  British  Columbia  under  Work- 
men's Compensation;  $2.10  in  Quebec.  Carpenters  $1.50  under  liability  law; 
$2  in  British  Columbia;  $5  in  Quebec.  Stone  quarries  $2.10  under  liability  law; 
$4.06  in  British  Columbia  under  Workmen's  Compensation,  and  $6.25  in  Quebec. 
New  York;  carpenters  under  liability  law  $1.75;  $5  under  compensation,  and 
$1.13  under  Pennsylvania  Liability  Law.  Bridge  building  is  pretty  hazardous, 
steam  railroads  are  pretty  high. 

Mr.  Wegenast  :  I  understand  from  conversations  with  insurance  men  that 
the  insurance  rates  for  Employers'  Liability  insurance  would  probably  be  in- 
creased by  fourfold  under  such  an  act  as  that  of  British  Columbia  or  Quebec. 

The  Commissioner:  Does  not  that  seem  to  indicate  that  unless  they  re- 
adjust the  figures  in  the  Washington  Act  they  are  going  bankrupt? 

Mr.  Wegenast  :  They  have  practically  the  same  rate.  These  rates  are  in 
some  cases  higher.  That  is,  the  Employers'  Liability  rates  there  are  higher  than 
the  State  rates. 

I  would  like  to  have  Mr.  Neely  express  his  views  as  to  whether  that  is  correct 
or  not.  The  general  statement  that  I  have  heard  is  that  the  rate  under  a  liability 
law  such  as  that  in  force  in  British  Columbia  would  be  four-fold  the  present  rate 
in  Ontario  approximately.  It  is  difficult  to  strike  an  average  I  know,  but  would 
you  say  that  was  correct? 

Mr.  Neely:  I  tbink  that  is  incorrect,  generally  speaking,  and  I  am  quite 
sure  it  would  be  wrong  with  the  Compensation  Act  if  it  had  certain  limitations. 
The  one  great  reason  why  the  British  Columbia  rates  are  so  much  higher  than 
the  Ontario  rates  to-day  is  that  there  is  this  alternative — the  man  is  entitled  to 
his  compensation  in  any  event,  and  he  first  tries  at  Common  Law  or  Employers' 
liability,  and  puts  the  employer  or  the  insurance  company,  which  is  the  same 
thing,  to  a-  very  heavy  expense  of  litigation.  It  is  practically  impossible  to  settle 
the  claim  for  a  reasonable  sum  with  the  lawyers.  They  know  they  are  going  to 
recover  a  certain  measure  of  damage  anyway,  and  the  case  has  to  be  defended 
and  then  finally  pay  in  the  end.  Now,  in  Manitoba,  that  hardship  is  eliminated, 
and  the  rates  we  have  begun  with  the  Manitoba  Act  are  very  much  less  than 
British  Columbia,  and  there  is  every  evidence  that  as  soon  as  we  have  a  little 
more  experience  we  can  reduce  them  still  further,  and  it  appears  so  far  as  we 
can  see  now  that  under  the  Compensation  Act  in  Manitoba  the  rates  will  not 
be  higher  than  they  are  in  Ontario  to-day. 

Mr.  Wegenast:  You  mean  to  say  the  rates  in  Manitoba  under  the  new  act 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  233 


where  compensation  is  given  for  practically  all  accidents  unless  they  are  due  to 
serious  and  wilful  misconduct  of  the  injured  man — you  say  the  rates  in  Manitoba 
will  not  likely  be  any  higher  than  in  Ontario  to-day? 

Mr.  Neely  :     As  far  as  we  can  see  at  this  time. 

The  Commissioner:  You  see  in  Ontario  there  is  still  the  common  law 
liability.     That  is  probably  what  is  in  Mr.  Neely's  mind. 

Mr.   Neely:     Yes. 

Mr.  Wegenast:  I  don't  undertake  to  set  up  my  knowledge  against  Mr. 
Neely's,  but  I  wouldn't  like  to  leave  that  statement  unquestioned.  However,  I 
am  not  prepared  to  challenge  it  now.  The  same  thing  would  not  apply  however 
in  Quebec. 

Mr.  Neely:  That  is  on  an  entirely  different  basis.  The  Quebec  Compensa- 
tion Act  has  departed  from  the  lines  on  which  all  the  Britisih  Compensation  Acts 
originally  have  been  drawn.  Each  Compensation  Act  in  Canada,  aside  from 
Quebec,  has  the  privilege  of  capital  settlement.  There  are  absolute  limitations, 
except  in  one  Province.  There  are  ho  annuities  or  anything  of  that  sort.  In 
Quebec,  the  whole  basis  of  the  act  is  annuity  and  it  is  impossible  to  make  a 
capital  settlement  under  the  law.  A  man  having  lost  any  part  of  his  anatomy, 
no  matter  how  small,  is  less  than  a  whole  man,  and  therefore  as  long  as  he  lives 
is  impaired,  and  on  that  basis  is  entitled  to  compensation. 

The  Commissioner:     Annually? 

Mr.  Neely:     It  is  payable  quarterly. 

Mr.  Wegenast:  There  is  no  difficulty  under  the  Quebec  Act,  though,  that 
the  employer  is  subject  to  any  common  law  liability,  and  besides  the  liability 
under  the  act  is  lower  than  that  under  the  British  Columbia  Act,  if  my  memory 
serves  me  rightly,  and  lower  than  that  of  the  Manitoba  Act,  I  think. 

What  I  am  getting  at  is  this  schedule  which  shows  for  instance  in  the  brick- 
making  industry,  under  the  laws  we  have  now,  practically  the  rate  was  42  cents, 
and  under  the  Compensation  law  in  Quebec  it  jumped  to  $2.10.  Now,  I  would 
like,  if  I  can,  to  have  this  schedule  verified  or  otherwise.  This  is  a  schedule  drawn 
by  Mr.  Dawson,  who  is  a  consulting  actuary  in  the  city  of  New  York,  a  joint 
author  with  Mr.  Frankel  of  a  work  on  compensation,  and  it  is  only  in  the  way 
of  verifying  that  schedule  that  I  am  raising  the  point. 

Mr.  Neely":  I  cannot  be  sure  from  memory  that  that  is  the  exact  rate, 
although  it  looks  as  though  it  might  be. 

Mr.  Wegenast  :  And  so  on  down  the  list,  The  carpenters  were  raised  from 
$1.50  to  $2  in  British  Columbia,  and  to  $5  in  Quebec? 

Mr.  Neely:     Yes. 

Mr.  Wegenast:  Blast  furnaces  from  40  cents  to  $1.36  in  British  Columbia, 
and  $3.90  in  Quebec;  glass  factories  from  42  cents  to  $1.26  in  British  Columbia, 
and  $2,10  in  Quebec,  the  largest  being  quarries  in  which  the  rate  raised  from 
$2.10  to  $4.06  in  British  Columbia,  and  $6.25  in  Quebec.  Those  rates  look  fairly 
reasonable  to  you  from  a  liability  insurance  standpoint? 

Mr.  Neely:  Well,  the  Quebec  rates  as  a  whole  are  greater  than  in  British 
Columbia,  but  I  didn't  recall  that  any  rate  was  so  very  much  greater  as  appears 
here. 

Mr.  Wegenast:  It  would  appear  there,  though,  that  the  estimate  that  the 
present  rate  would  be  multiplied  by  four  is  fairly  reasonable. 

Mr.  Neely:  Not  in  all  classes. 

Mr.  Wegenast:  As  nearly  as  you  can  strike  an  average,  of  course? 

Mr.  Neely  :     It  is  difficult  to  strike  an  average,  for  this  reason,  in  Quebec 


234  MINUTES  OF  EVIDENCE:  No.  65 

I  mean,  that  in  certain  industries  the  accidents  that  occur  are  more  apt  to  cause 
permanent  disability  than  certain  other  industries,  and  where  we  have  had  to 
deal  with  the  rates  have  increased  very  much  greater  than  in  others.  For  in- 
stance, in  the  stamping  and  pressing  of  metals  with  dies  and  such  things  where 
fingers  are  lost,  and  hands  are  lost,  and  in  rolling  mills  and  works  of  that  sort, 
the  risks  proportionately  have  increased  much  more  than  in  certain  trades  where 
injuries  are  temporary  and  the  people  recover  from  them. 

Mr.   Wegenast:   Then,   I   suppose  in  industries   like   the  textile   industries 
where  the  injuries  are  usually  of  a  minor  character,  and  where,  under  the  com- 
mon law,  or  such  law  as  we  have  here,  there  is  little  chance  of  recovery,  the  ratio 
of  increase  would  be  much  larger. 

Mr.  Neely  :  Yes,  for  the  reason  that  in  like  hazards,  in  boot  and  shoe  manu- 
facturing and  things  like  that,  under  the  common  law  conditions  a  compara- 
tively small  percentage  of  accidents  result  in  claims,  and  under  a  Compensation 
Act  a  very  large  percentage,  as  high  sometimes  as  90  per  cent.,  result  in  claims, 
and  that  causes  a  much  heavier  increase  in  the  rate. 

Mr.  Wegenast:  Then  in  those  industries  where  the  hazard  is  great  and 
where  there  is  recovery  under  the  present  law  in  Ontario  in  a  larger  proportion  of 
cases,  the  ratio  of  increase  in  the  rate  would  not  be  so  large? 

Mr.  Neely:  Exactly. 

Mr.  Wegenast:  The  rate  is  already  high  and  would  not  raise  very  much 
more? 

Mr.  Neely:  In  the  bridge  building  class,  which  I  think  is  the  highest  class, 
the  rate  in  Quebec  was  actually  reduced  under  this  Act. 

Mr.  Wegenast:  To  what  do  you  attribute  that? 

Mr.  Neely  :  For  the  reason  that  when  accidents  occur  in  the  bridge  building 
trade  they  are  very  very  serious  in  any  event,  and  their  claims  are  made  in  large 
amounts — have  to  be  made. 

Mr.  Wegenast  :  That  is  under  the  common  law  the  recoveries  are  for  large 
amounts,  and  now  the  amounts  are  reduced? 

Mr.  Neely:  It  is  now  on  the  basis  of  half  the  wage,  and  it  has  acted  as  a 
relief. 

Mr.  Wegenast  :  In  these  more  hazardous  occupations,  for  instance,  quarries, 
where  the  rate  under  the  liability  law  now  is  apparently  about  $2.10,  it  is  likely 
that  the  rate  would  rise  as  high  at  least  as  in  British  Columbia,  where  it  is 
$4.06,  practically  double,  or  perhaps  even  go  to  what  it  is  in  Quebec,  $6.25.  It 
would  be  very  likely  in  a  hazardous  occupation  to  double? 

Mr.  Neely  :  That  would  all  depend  upon  the  text  of  the  act. 

The  Commissioner  :  The  amount  of  the  compensation.  The  limit  of  the 
compensation  ? 

Mr.  Neely  :    No,  sir,  riot  entirely,  if  the  workman  was  required  to  elect. 

The  Commissioner:  But  assuming  he  must  get  compensation  and  that  only. 
That  is  what  I  understood  you  to  say,  that  if  that  were  the  law  in  this  Province 
you  did  not  think  the  rates  would  be  much  increased  ? 

Mr.  Neely:  Not  a  great  deal,  I  think. 

The  Commissioner:  Now,  if  it  is  a  fair  question  to  ask  you,  supposing  you 
were  asked  to  have  a  monopoly  of  the  business  on  that  schedule,  could  it  be  pro- 
fitably run  and  all  employers  of  labour  brought  within  it? 

Mr.  Neely:  It  would  require  more  of  an  actuary  than  I  am  to  answer 
that  question. 


1912  VVOKKMK.VS  COMPENSATION  COMMISSION.  23! 


Mr.  Wegenast:  That  confirms  what  I  said  about  the  rate.  Of  course  they 
are  set  down  there  in  percentages,  6y2  per  cent.  That  is  the  form  of  the  report 
that  is  put  in  under  the  Washington  Act. 

Mr.  Neely  :  In  fact,  I  doubt  if  any  one  could  answer  such  a  question  where 
the  rates  are  constantly  changing,  as  experience  shows  they  should. 

The  Commissioner:  I  thought  you  said,  Mr.  Neely,  looking  at  the  same 
thing  I  showed  you,  that  it  wasn't  very  different  from  the  accident  insurance 
company  rate? 

Mr.  Neely:  Yes,  but  I  didn't  know  to  what  sort  of  law  this  applied. 

The  Commissioner:  There  is  the  common   law. 

Mr.  Wegenast:  It  depends  on  the  amount  of  the  benefits. 

Mr.  Neely:  It  depends  on  the  benefits,  the  limitations,  and  the  various 
conditions  in  the  act  which  will  make  for  the  cost  of  it. 

Mr.  Kingston  :  Might  I  make  this  suggestion,  Mr.  Neely,  that  most  of  your 
liability  rates  applying  to  this  Province  are  based  upon  the  statutory  limit  of 
$1500.00? 

The  Commissioner:  Or  three  years'  wages? 

Mr.  Kingston  :  To  the  ordinary  rate  I  think  they  apply  the  limit  of  $1500.00, 
except  in  certain  cases  where  the  higher  rate  is  paid  if  the  applicant  for  the  in- 
surance wants  the  increased  indemnity.     That  is  so,  is  it  not,  Mr.  Neely? 

Mr.  Neely:     The  basis  rate  is  $1,500.00. 

Mr.  Wegenast  :  In  one  accident,  or  one  person  ? 

Mr.  Neely:  For  one  person. 

Mr.  Wegenast:  What  is  the  limit  for  any  one  accident? 

Mr.  Neely:    $10,000. 

Mr.  Wegenast  :  Even  if  a  man  wants  to  have  that  limitation  removed,  and 
if  the  limitation  was  $20,000,  what  increase  will  there  be  in  the  rate? 

Mr.  Neely:     From  $1,500  to  $20,000. 

Mr.  Wegenast:  Supposing  the  limit  is  now  $10,000,  and  suppose  a  man 
wants  a  policy  which  will  raise  that  limit  to  $20,000,  what  increase  will  there 
be  in  the  rate? 

Mr.   Neely  :  It  would  depend  upon  the  industry  first. 

Mr.  Wegenast  :  For  instance,  in  quarries  ? 

Mr.  Neely:  From  memory  I  cannot  say,  but  I  should  think  about  15  per 
cent. 

Mr.  Wegenast:  I  understood  the  increase  was  about  100  per  cent. 

Mr.  Neely:  No,  it  can't  be. 

Mr.  Wegenast:  I  understood  it  was  the  practice  to  charge  twice  the  rate 
when  they  raised  the  limit.  Perhaps  I  am  mistaken.  Perhaps  I  should  say  the 
$1,500  limit,  if  that  is  raised  to  $3,000  in  the  case  of  each  person,  would  the  rate 
be  doubled  then? 

Mr.  Neely:    That  would  be  about  25  per  cent,  additional. 

Mr.  Kingston  :  I  don't  suppose  many  of  the  companies  would  increase  their 
total  liability  above  $10,000? 

Mr.  Neely:  Well,  it  would  depend  upon  the  industry. 

Mr.  Wegenast:     They  would  reinsure,  I  suppose. 

The  Commissioner:  In  your  company,  Mr.  Neely,  how  many  cases  have 
you  where  your  limit  of  $10,000  has  been  passed?    Has  there  been  one? 

Mr.  Neely:    Yes. 

The  Commissioner:  Any  more  than  that? 


236  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Neely  :    I  don't  think  so. 

Mr.  Wegenast:  I  don't  suppose  you  would  be  prepared  to  say  what  was 
done  in  that  one  case?  But  it  has  come  to  my  notice  that  cases  of  this  kind 
happen.  In  an  industry  in  the  city  of  Toronto  where  a  fire  occurred  sixteen 
persons  were  injured,  and  the  liability  company  refused  to  settle  the  claim.  I 
don't  know  what  company  it  was.  The  employers  settled  the  claim  on  the  best 
basis  that  they  could  get,  and  after  considerable  dispute  with  the  insurance 
company  finally  got  a  settlement  from  the  insurance  company  on  the  basis  of 
one  half  of  what  they  had  paid. 

The  Commissioner  :  How  does  that  bear  upon  it  unless  the  amount  ex- 
ceeded $10,000? 

Mr.  Wegenast  :  Now,  the  question  that  arises  there,  and  that  I  suppose  will 
be  raised  sooner  or  later,  is  the  disposition  of  the  company  and  its  policy  where 
the  legal  liability  is  not  strictly  defined.  Perhaps  the  matter  can  be  brought  to 
a  point  in  this  way.  Is  it  the  practice  of  liability  companies  to  hold  themselves 
and  their  responsibility  to  the  strictly  legal  liability  of  the  employer,  or  do 
they  consider  their  insurance  covers  more  than  the  legal  liability  of  the  em- 
ployer ? 

Mr.  Neely  :  That  is  all  they  pretend  to  insure. 

Mr.  Wegenast:  Then  if  an  employer  wishes  to  have  his  men  insured  for 
something  further  than  the  mere  liability  under  the  law,  if  he  wants  his  men 
insured  against  accident,  he  would  have  to  pay  a  higher  rate? 

Mr.  Neely:  It  would  be  impossible  to  ins^^re  a  man  against  accident.  We 
only  attempt  to  insure  an  employer  against  loss  on  account  of  the  accident. 

Mr.  Wegenast:     Against  his  liability  to  pay  compensation? 

Mr.  Neely:     That  is  all.     We  couldn't  prevent  the  accident. 

Mr.  Wegenast  :  I  am  not  speaking  of  that.  You  cannot  prevent  a  death.  In 
insuring  a  man's  life  you  don't  assume  that,  but  what  I  mean  is,  suppose  the 
employer  is  not  legally  liable  you  do  not  consider  yourselves  liable  to  pay  the 
claim.     You  put  yourself  in  the  place  of  the  employer? 

Mr.  Neely:  Exactly. 

The  Commissioner:  Does  that  mean  you  recognize  no  moral  claim? 

Mr.  Neely:  I  am  speaking  of  our  contract,  sir.  Our  contract  is  to  insure 
the  employer  against  legal   liability. 

Mr.  Wegenast  :  1  have  a  statement  here  if  at  any  stage  you  care  to  hear  it- 
It  bears  directly  on  that  question,  and  I  would  like  to  ask  Mr.  Neely  some  ques- 
tions about  it.  It  arises  directly  out  of  this.  There  is  a  page  or  two  leading  up 
to  it  that  I  would  almost  have  to  read. 

The  Commissioner:  Very  well. 

Mr.  Wegenast:  Practically  all  workmen's  compensation  legislation  is  an 
effort  to  embody  what  is  called  the  theory  of  'professional  risks.'  Under  this 
theory  the  cost  of  human  wear  and  tear  is  supposed,  like  the  cost  of  machinery, 
raw  material,  etc.,  to  be  thrown  upon  the  industry  and  included  in  the  price 
charged  to  the  consumer  for  the  product  of  the  industry.  When  we  come  to  ex- 
amine the  different  conpensation  systems  of  the  world  we  find  three  distinct 
methods  of  applying  this  theory.  These  methods  may  respectively  be  termed  the 
individual  liability  method,  the  collective  liability  method,  and  the  State  liability 
method.  Every  system  in  the  world  can  be  classified  under  one  or  other  of  these 
heads. 

Under  an   individual    liability  system   the  liability  to  compensate  the  work- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  23 


!" 


man  is  thrown  upon  the  individual  employer  as  an  element  of  the  relationship  of 
employers  and  employees.     A  term  is  imposed    upon   the  contract  of  employment 
by   which    the    employer   assumes    an    obligation,   more    or   less    extensive,    to    in- 
demnify  the   workman   for  injuries   received   in  the  course   of,  or  in  connection 
with,  the  employment.     The  injured  employee  looks  for  his  relief  to  his  employer, 
who  thus  becomes  an  individual  insurer  of  the  workman  against  injury.       The 
principle  of  individual  liability  is  illustrated  in  the  English  Workmen's  Compen- 
sation Act  of  1897  as  extended  in  1906,  and  in  the  Acts  which  are  now  in  force 
in  seven  of  the  nine  provinces  in  Canada,  including  the  Province  of  Quebec.       I 
am  aware  that  the  act  of  the  Province  of  Quebec  was  copied  to  a  large  extent 
verbally  from  the  law  in  force  in  France,  under  which  a  State  guarantee  system 
is  set  up;  but  by  the  omission  of  the  provisions  of  the  French  law  respecting  the 
participation  of  the  State,  the  Quebec  Act  was  made  merely  a  replica  of  the  Eng- 
lish Act  couched  in   different  phraseology.     The   English  system  .has  also  been 
copied  in  other  portions  of  the  British  Empire  and  in  a  number  of  States  of  the 
United  States.     In  all  these  jurisdictions  employers  within  the  scope  of  the  laws 
are  required,  regardless  to  a  very  large  extent  of  questions  of  fault,  to  compen- 
sate their  employees  for  injuries  received  by  them  in  the  course  of  their  employ- 
ment.    Employers  are,  of  course,  permitted,  and  in  some  cases  encouraged,  to 
insure  themselves   against  their  liability  for  compensation  by  some  form  of  in- 
surance. 

Right  here,  let  me  point  out  a  vital  distinction  between  the  two  classes  of 
insurance,  a  consideration  of  which  is  involved  in  any  discussion  of  the  subject 
of  workmen's  compensation.  There  is,  on  the  one  hand,  accident  insurance,  and 
on  the  other  employers'  liability  insurance.  A  great  deal  of  confusion  in  dis- 
cussions of  the  subject  is  due  to  a  failure  to  distinguish  the  two  types  of  insur- 
ance, and  superficial  theorists  who  have  advocated  the  so-called  voluntary  in- 
surance system  as  against  the  so-called  compulsory  insurance  system,  have  argued 
that  the  employer  who  finds  himself  under  the  heavy  obligations  imposed  by  an 
individual  liability  law  will  almost  inevitably  resort  to  insurance.  This  is  in  one 
sense  true,  but  the  insurance  which  the  employers  thus  effect  is  not  of  a  type 
which  affords  any  great  protection  to  the  workman.  It  is  true  that  some  em- 
ployers under  these  systems  take  out  real  accident  insurance  policies  for  the 
benefit  of  the  workman  injured  or  the  family  of  the  workman  killed.  Such  insur- 
ance may  cover  the  risk  of  injury  in  the  course  of  employment  only,  or  may  be 
extended  to  any  accidents  to  the  workman  regardless  of  the  occasion. 

I  understand  that  to  be  the  case,  Mr.  Neely.  There  is  a  form  of  policy 
which  I  think  they  call  a  workman's  collective  policy,  under  which  the  company 
assumes  not  only  the  legal  liability  of  the  employer,  but  also  assumes  the  burden 
of  insuring  the  workman  against  all  accidents.     That  is  what  I  want  to  get  at. 

Me.  Neely  :     We  have  various  kinds  of  policies. 

Mr.  Wegenast:  That  is  not,  then,  a  strictly  liability  policy? 

Mr.  Neely:  We  call  it  a  workman's  collective,  meaning  a  collective  accident 
policy. 

Mr.  Wegenast:  Then  what  I  wanted  to  get  at  was  the  difference  in  the 
rates  of  insurance.  What  difference  would  you  make,  for  instance,  on  the  pay- 
roll of  a  stove  foundry,  between  insuring  the  men  against  all  accidents,  and  in- 
suring only  the  employer  against  liability  to  pay  compensation  ? 

Mr.  Neely  :  Well,  the  difference  would  rest  entirely  upon  the  nature  of  the 
legislation  under  which  we  had  to  deal  with  the  liability  case.     The  terms  of  an 


238  MINUTES  OF  EVIDENCE:  No.  65 

act,   the  common  law,   and  such   things,  all  govern  the  rates   of  liability  insur- 
ance.    The  physical  hazard  alone  governs  the  rate  of  personal  accident  .insurance. 

Mb.  Wegenast:  What  I  want  to  get  at  is,  there  wouldn't  be  anything  to 
prevent  your  company  issuing  a  policy.     I  suppose . 

Mr.  Neely:  I  would  be  very  glad  to  give  you  an  idea,  but  it  is  entirely 
impossible  until  one  knows  the  law  about  which  you  are  speaking. 

Me.  Wegenast:  Take  under  the  present  law  in  Ontario.  What  ratio  would 
there  be  between  a  workman's  collective  policy,  under  which  the  workman  is  insured 
against  accident,  and  a  liability  policy  under  which  the  employer  is  insured  against 
liability. 

The  Commissioner  :  You  eliminate  one  of  the  important  features  of  our  act, 
that  it  is  only  in  the  case  of  negligence  that  the  employer  is  liable. 

Mr.  Wegenast  :  I  understand  that,  but  I  am  trying  to  get  some  sort  of  basis 
to  build  on.     I  don't  want  to  press  the  matter. 

Mr.  Neely  :  Well,  in  different  occupations  or  industries  of  course  that 
difference  varies.  Take  the  carpenters'  and  builders'  trades,  my  recollection  is  where 
$1.50  is  the  rate  in  Ontario  for  employers'  liability,  the  collective  policy  is  about  $2. 
I  am  just  speaking  from  recollection.     That  is  in  that  trade. 

Mr.  Wegenast  :  What  I  have  read,  I  may  say,  your  Lordship,  is  what  I  read 
before  the  Bar  Association  yesterday.  The  Association,  I  believe,  passed  a  resolu- 
tion to  pass  it  on  to  your  Lordship,  but  I  protested  against  that  for  reasons  that 
are  probably  apparent.  I  would  not  have  brought  it  up  now  if  it  was  not  that  the 
subject  had  been  opened  up.  I  go  on  to  say  that  it  is  true  that  some  employers 
under  these  systems  take  out  real  insurance  policies  for  the  benefit  of  the  workman 
injured  or  the  family  of  the  workman  killed.  "  Such  insurance  may  cover  the  risk 
of  injury  in  the  course  of  employment  only,  or  may  be  extended  to  any  accident  to 
the  workman  regardless  of  the  occasion." 

These  collective  policies  would  not  cover  the  man  who  happened  to  be  injured 
putting  up  a  set  of  pipes  outside? 

Mr.  Neely:     If  they  paid  for  it. 

Mr.  Wegenast:     That  would  be  a  third  policy? 

Mr.  Neely:     No,  a  similar  policy  with  a  higher  rate. 

Mr.  Wegenast:  "  The  essential  feature  of  this  class  of  insurance  is  that  it  is 
the  workman  who  is  insured.  The  large  bulk  of  employers,  however,  for  reasons 
which  are  quite  apparent,  insure,  not  the  workman  against  accident  but  themselves 
against  liability  for  accident.  And  this  practice  has  occasioned  the  development, 
in  all  jurisdictions  where  the  compensation  legislation  takes  the  individual  liability 
form,  of  a  system  of  employers'  liability  insurance.  Under  this  type  of  insurance 
the  employer  insures  not  the  workman  against  accident,  but  himself  against  liability. 
Liability  insurance  bears  to  accident  insurance  a  relation  analogous  to  that  which 
would  exist  between  a  policy  under  which  a  man  should  insure  himself  against 
legal  liability  for  non-support  of  his  wife  and  children,  and  an  ordinary  accident  or 
life  insurance  policy." 

The  Commissioner:     What  connection  has  that? 

Mr.  Wegenast:  The  insurance  company  in  the  case  of  liability  insurance 
assumes  absolutely  no  moral  obligation,  as  you  have  suggested,  sir  It  simply 
insures,  and  stands  in  the  place,  and  subrogates  itself  to  the  position  of  the  employer, 
and  takes  up  the  burden  that  he  would  otherwise  have  borne,  and  takes  up  the 
defences  such  as  they  may  be  that  the  employer  has,  and  I  thought  it  might  be  well 
to  emphasize  that,  and  get  Mr.  Neely  to  confirm  it. 
The  Commissioner:     He  has  already  said  that. 


1912  WOEKMEN'-S  COMPENSATION  COMMISSION.  239 

Mr.  Neely:  I  would  like  to  answer  that  a  little  more  explicitly  since  the 
question  has  been  asked.  The  insurance  company  sells  a  certain  contract  which 
is  the  kind  of  contract  that  the  purchaser  wants  to  buy.  Now,  if  the  purchaser 
being  an  employer  wishes  to  cover  these  moral  obligations,  these  charitable  obli- 
gations or  humanitarian  obligations,  the  company  is  quite  prepared  to  issue  him 
such  a  contract,  but  when  the  employer  tells  us  that  he  is  not  willing  to  pay  for 
these  things  at  all,  that  he  wants  the  bare  price  of  his  legal  obligation,  we  give  him 
that  price  and  we  give  him  that  contract. 

The  Commissioner:  Would  it  make  any  difference  supposing  a  case  of  this 
kind.  Take  this  International  Harvester  Company  with  2,500  to  3,000  men,  and 
they  came  to  you  and  asked  you  to  write  an  accident  policy  on  3,000  men.  Would 
your  rates  be  any  cheaper  than  if  I  came,  being  in  the  same  employment  ? 

Mr.  Neely  :     Being  a  larger  risk  ? 

The  Commissioner:  You  get  3,000  risks  in  one  case.  Would  the  rates  be 
much  lower? 

Mr.  Neely:  If  we  were  writing  personal  accident  insurance  it  would.  On 
the  collective  insurance  basis  it  would  not,  because  the  expense  rate  contemplates 
the  same  on  both.  Where  individual  policies  are  written  on  those  3,000  men  the 
work  attendant  upon  it,  and  so  on,  is  very  extensive. 

Mr.  Wegenast:  There  is  another  feature  of  the  rates  I  would  like  to  ask 
about,  Mr.  Neely.  The  origin  of  liability  insurance,  so  far  as  Anglo-Saxon  juris- 
dictions at  all  events  are  concerned,  I  think  was  after  the  Chamberlain  Act  of  1880. 

Mr.  Neely  :     Yes,  it  began  in  England  about  that  time. 

Mr.  Wegenast:  And  your  company,  being  one  of  the  largest  companies  in 
England,  I  suppose  took  it  up  at  that  time? 

Mr.  Neely:    Yes. 

Mr.  Wegenast  :  Now,  what  do  you  say  as  to  the  correctness  of  the  basis 
of  rates  on  which  you  started,  and  the  alterations  which  you  found  necessary  in 
those  rates  as  you  gained  experience  under  the  act?  I  don't  want  to  put  it  in  the 
form  of  a  definite  question. 

Mr.  Neely:     Do  you  mean,  were  the  changes  upwards  or  downwards? 

Mr.  Wegenast:  Did  you  find,  for  instance,  that  you  could  really  strike  a 
proper  rate  at  first? 

Mr.  Neely:    It  was  all  speculative  at  first. 

The  Commissioner:     Of  course  they  went  on  the  high  side. 

Mr.  Wegenast  :     Is  that  a  fact,  Mr.  Neely  ? 

Mr.  Neely  :  The  records  of  the  companies  have  shown  that  they  have  gener- 
ally been  on  the  wrong  side. 

The  Commissioner:     At  the  start? 

Mr.  Neely:  Even  with  the  increasing  rates  they  have  not  got  them  high 
enough. 

The  Commissioner  :     Not  making  any  money  ? 

Mr.  Neely  :  One  of  the  very  large  companies  in  the  States  doing  a  business 
of  over  $1,000,000  of  premiums  annually  showed  a  net  underlying  loss  last  year 
of  over  3  per  cent. 

The  Commissioner  :  I  would  like  to  know  how  many  law  suits  that  company 
has  in  its  solicitors'  hands? 

Mr.  Neely  :     Something  over  4,000. 

The  Commissioner  :     That  is  where  the  trouble  comes. 

Mr.  Neely  :  That  is  exactly  what  I  tried  to  say  in  the  beginning.  It  is  the 
enormous  waste  that  is  caused  to  the  insurance  companies  or  the  employer,  being 


240  MINUTES  OF  EVIDENCE:  No!  65 

the  same  thing,  through  the  misunderstanding  of  the  act,  and  through  it  being 
impossible  for  the  workman  and  the  employer  to  agree.  That  is  what  causes  these 
high  rates  and  these  high  losses.  If  a  Compensation  Act  were  enacted  giving  reason- 
able benefits  to  the  workman  that  are  clearly  defined,  having  reasonable  limitations, 
■and  making  it  alternative  if  he  chooses  to  make  his  recovery  at  common  law  he 
forfeits  his  right  to  compensation,  there  would  be  a  great  reduction  in  the  cost  and 
no  hardship  to  the  workman. 

The  Commissioner  :  Why  should  not  the  odd  workman  here  and  there  that 
might  have  a  common  law  action  give  up  the  right  for  the  sake  of  the  many  getting 
a  better  compensation  ? 

Mr.  Neely:  I  don't  know  that  it  is  necessary  that  he  should  be  required  t» 
give  it  up  before  the  event,  but  after  the  event  it  does  not  seem  a  hardship  that  he 
should  be  required  to  determine  then  how  he  is  going  to  proceed  to  recover. 

The  Commissioner:  You  see  he  has  certain  rights  at  common  law.  Now, 
if  you  give  him  additional  rights  that  he  would  not  have,  giving  him  the  right  to 
recover  where  he  could  not  recover  at  all  at  common  law,  would  it  not  be  just  in 
return  to  ask  him  to  surrender  his   common   law   right? 

Mr.  Neely  :  I  think  where  that  has  been  tried  very  serious  objections  have 
been  found  to  it,  on  the  ground  that  he  should  not  be  asked  to  surrender  his 
common  law  right  except  voluntarily,  but  where  the  compensation  was  given  to 
him  through  a  legislative  act  it  was  quite  proper  he  should  not  be  entitled  to  that 
compensation  if  lie  saw  fit  to  pursue  his  other  claim. 

The  Commissioner:  That  would  involve  a  hardship.  If  a  man  thought  he 
had  a  claim  at  common  law  and  failed  in  that  then  he  would  be  without  a  remedy. 
That  seems  a  pretty  harsh  result. 

Mr.  Neely:  He  always  has  the  opportunity  of  taking  that  common  law 
right  before  he  takes  action. 

The  Commissioner  :  But  perhaps  he  does  not  find  out  before  he  is  on  the 
last  heat  that  he  has  been  on  the  wrong  track? 

Mr.  Neely:  Our  experience  in  Canada  under  these  acts  has  shown  where  he 
must  elect  that  very  few  cases  that  are  brought  at  common  law  fail. 

Mr.  Wegenast  :     Do  you  find  that  borne  out  by  the  statistics  in  England  ? 

Mb.  Neely:     I  am  speaking  of  Canada. 

Mr.  Wegenast  :  What  I  understand  his  Lordship  wants  to  know  is  the 
possible  effect  under  a  compensation  law  such  as  they  have  in  England.  Here  the 
conditions  are  of  course  entirely  different. 

Mr.  Neely:  T  understand  from  our  people  in  England  that  common  law 
claims  are  quite  exceptional  now  under  the  existing  act. 

Mr.  Wegenast:  The  workmen  prefer  to  take  the  certainty  under  the  Com- 
pensation Act  rather  than  the  uncertainty  at  common  law. 

Mr.  Neely:  Yee,  and  that  would  be  so  here  if,  as  I  say,  the  Commission 
required  to  look  after  the  accidents 

Mr.  Wegenast:  What  effect  would  it  have  on  the  rate?  It  would  still  have 
an  effect  on  the  rate  if  the  common  law  right  of  action  remained  open? 

Mr.  Neely:     As  an  alternative? 

Mr.  Wegenast:     Yes. 

Mr.  Neely  :  I  think  the  rate  might  be  increased  somewhat.  It  would  not  be 
increased  anything  like  the  present  British  Columbia  rate. 

The  Commissioner  :  Of  course  it  must  be  increased  because  there  is  a  greater 
risk. 

Mr.   Neely:     There  are  a   greater  number  of  claims   out   of  one  hundred 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  211 

accidents  that  would  result  no  doubt,  but  the  average  cost  of  each  claim  would  be 
very  much  less.  Now,  under  employers'  liability  conditions  and  negligence  con- 
ditions such  as  we  have  in  Ontario,  we  find  the  percentage,  we  will  say,  of  about 
40  to  100  where  claims  are  made.  Under  Workmen's  Compensation  conditions  the 
percentage  increased  at  once  until  we  expect  from  80  to  90  per  cent.,  but  a  great 
many  are  for  very  small  sums.  The  first  week  or  two  weeks  elimination,  which 
most  Acts  carry  with  them,  prevents  a  large  number  of  petty  claims.  They  are 
claims  of  temporary  disability,  three,  four,  six,  eight,  and  ten  weeks,  and  so  forth. 
The  amounts  are  comparatively  small  and  the  money  goes  directly  to  the  claimant 
without  cost. 

The  Commissioner:  A  statement  has  been  made  here,  and  made  elsewhere, 
that  the  present  law  is  practically  useless  to  the  workman  and  does  not  help  him. 
I  would  like  to  know  if  you  could  tell  us  off  hand  in  what  percentage  of  cases  you 
have  defended  you  have  succeeded? 

Mr.  Neely:     I  couldn't  give  you  that  correctly. 

The  Commissioner:     Was  it  very  small? 

Mr.  Neely:  It  is  very  small.  It  is  quite  the  exception  that  we  succeed  in 
the  defence. 

Mr.  Wegenast:  Speaking  of  the  rates  in  the  United  States,  I  think  you 
mentioned  that  the  American  companies  found  that  the  rates  are  still  inadequate 
and  that  there  are  no  profits  in  the  business  of  liability  insurance.  What  would 
you  say  as  to  the  conditions  in  England  at  present? 

Mr.  Neely  :  The  same  report  comes  from  England,  that  the  business  is  not 
profitable  at  the  present  rates. 

Mr.  Wegenast  :  So  that  that  means  if  you  are  to  get  any  profits  the  rates 
would  have  to  be  raised? 

Mr.  Neely  :  In  England,  yes. 
'  Mr.  Wegenast  :  Now,  I  have  here  a  statement  copied  from  one  of  the  leading 
scientific  journals  of  England,  on  which  I  am  not  able  to  lay  my  hands  for  the 
moment.  It  is  taken  from  a  report  of  the  Board  of  Trade  showing  the  percentage 
of  premiums  that  are  paid  into  employers'  liability  companies  that  are  actually 
paid  out  in  the  form  of  benefits  to  the  injured  persons  or  their  dependants,  and  I 
see  here  that  there  is  still  credited  to  commissions  and  expenses  under  the  English 
system  35.91  per  cent,  of  the  premium.  Could  you  say  anything  as  to  the  correct- 
ness of  that? 

Mr.  Neely  :     I  think  that  is  about  correct. 

Mr.  Wegenast  :  So  there  is  nearly  36  per  cent,  of  the  money  paid  out  by  the 
employers  that  does  not  reach  the  workmen? 

The  Commissioner:  We  had  the  figures  at  Cobalt,  and  it  is  very  much 
greater.  The  amount  that  the  person  injured  received,  or  his  dependants,  was  very 
much  less  than  went  in  other  directions.     I  have  forgotten  the  figures. 

Mr.  Wegenast:  There  might  be  a  condition,  your  Lordship,  where,  as  in 
England,  the  employer  is,  so  to  speak,  stripped  of  his  defences,  and  his  chances  of 
being  able  to  defend  are  lost.  It  might  tend  to  lessen  litigation  to  strip  him  of 
defences,  and  induce  settlements  in  a  larger  number  of  cases  where  there  is  a  good 
defence,  but  still  in  England  apparently  36  per  cent,  of  the  money  that  is  paid  out 
does  not  reach  the  pockets  of  the  workmen. 

Mr.  Neely:     I  do  not  think  that  is  exaggerated. 

Mr.  Waldron  :     Does  that  include  the  expense  of  litigation  ? 

Mr.  Neely:     Yes,  all  expenses. 

The  Commissioner:     The  expenses  of  getting  business  also? 
16  L. 


242  MINUTES  OF  EVIDENCE:  No.  65 

Mr.  Neely:  Yes.  Eliminating  the  expense  of  getting  the  business  it  is 
very  doubtful  whether  any  concern,  whether  it' is  a  private  corporation  or  otherwise, 
could  conduct  its  business  for  a  smaller  ratio  than  the  insurance  company.  The 
stock  interest  necessary  looks  after  the  expenditure  and  the  directors  are  looking 
after  the  expenditure,  and  all  things  are  curtailed  as  much  as  possible.  The  one 
charge  of  getting  business  is  something  which  might  be  eliminated  where  there  is 
State  insurance. 

Mr.  Wegenast:  But  apparently  the  ratio  ought  to  be  still  larger  to  allow 
for  some  profit  to  the  stockholders,  because  you  say  the  business  is  being  run  at 
a  loss.     The  additions  to  the  premiums  would  necessarily  be  added  entirely  to  that 

35  or  36  per  cent. 

The  Commissioner  :  I  did  not  understand  Mr.  Neely  to  say  it  was  run  at  a 
loss,  but  the  rates  were  not  high  enough  to  make  a  fair  return. 

Mr.  Wegenast  :     Yes,  but  any  added  expense  would  have  to  be  added  to  that 

36  per  cent.     It  would  not  decrease  what  went  to  the  workman  or  his  dependants. 

Mr.  Neely:     I  don't  quite  understand  you. 

Mr.  "Wegenast  :  The  increase  in  the  rates  is  not  for  the  benefit  of  the  work- 
man. He  would  not  get  any  more  for  each  individual  claim  by  the  increase  of 
the  rates? 

Mr.  Neely:     The  presumption  is  he  is  getting  what  he  is  entitled  to. 

Mr.  Wegenast:  The  tendency  is  not  to  increase  the  efficiency  of  the  Eng- 
lish Act,  but  to  decrease  it. 

Mr.  Neely:  It  is  not  a  question  of  affecting  the  act  in  any  way.  It  is 
as  affecting  the  business  end. 

Mr.  Wegenast:  I  am  speaking  of  the  act  as  an  agency  for  putting  in  the 
pockets  of  the  workmen  the  money  that  is  paid  out  by  the  employer.  There  is 
still  apparently  35  or  36  per  cent,  that  goes  astray,  and  if  there  is  an  increase  in 
it  it  would  be  still  more. 

Mr.  Neely:  Is  it  presumed  by  anyone  that  insurance  operated  by  the  State 
could  be  done  for  nothing? 

Mr.  Wegenast  :  I  am  not  speaking  of  that,  Mr.  Neely.  I  am  just  speaking 
of  the  general  point  there.  Then  there  is  another  point  I  would  like  to  raise  if 
this  is  the  time  to  do  it.  A  liability  insurance  system  is  not  compatible  with  a 
system  where  the  payments  are  periodical.  That  is,  a  liability  company  would 
not  assume  the  payments  of  weekly  or  quarterly  or  monthly  amounts.  Their  de- 
sire is  to  commute  the  payments  and  wipe  them  off  the  books. 

Mr.  Neely:  On  the  contrary  the  liability  insurance  is  better  in  the  case  of 
deferred  and  annual  payments  because  the  liability  insurance  company  under  the 
supervision  of  State  Departments  is  required  to  make  certain  deposits  and  guar- 
antees and  is  a  far  safer  institution  for  the  workman  to  draw  from  than  the  in- 
dividual manufacturer  who  might  be  out  of  business  to-morrow,  and  he  has  nothing 
to  get. 

Mr.  Wegenast:  Do  you  as  a  matter  of  practice  in  England,  your  company 
being  one  of  the  largest  in  business  in  England,  assume  the  payment  of  these 
weekly  periodical  payments. 

Mr.  Neely:     Yes. 

Mil  Wegenast:  You  have  the  men  coming  to  the  office  drawing  their 
weekly  payments? 

Mr.  Neely:     Yes. 

The  Commissioner:     You  do  it  in  Quebec  too,  don't  you? 

Mr.  Neely:     Yes. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  243 

, . — > 

Mr.  Wegenast:     I  understood  the  contrary  was  the  case,  that  your  policy 

was  to  commute. 

Mr.   Neely:     Our  company  is  an   annuity  company.     We   are  qualified  to 

sell  those  annuities. 

Mr.  Wegenast:  Then  what  is  the  practice  of  other  companies  in  employers' 
liability  business?     Do  they  all  assume  the  burden  of  paying  these? 

Mr.  Neely:     As  far  as  I  know. 

Mr.  Wegenast:  So  that  the  employers'  liability  companies  here  in  Tor- 
onto, and  other  liability  insurance  companies  here  are  making  pension  payments 
•under  the  system  where  the  liability  would  be  thrown  directly  on  the  employer? 

Mr.  Neely:     Yes. 

Mr.  Wegenast:     The  injured  persons  would  get  their  cheques  for  that? 

Mr.  Neely:  The  Compensation  Act  in  Quebec  has  contemplated  that  one 
ihing  by  providing  that  upon  application  of  the  workman  in  the  case  of  a  per- 
manent disability,  the  employer  may  be  required  to  pay  into  an  insurance  com- 
pany a  capital  sum,  and  the  annuity  paid,  and  the  insurance  company  being  the 
■one  qualified  has  to  be  the  custodian  of  the  fund  and  pay  out  the  annuities. 

Mr.  Bancroft  :  There  is  just  one  thing,  your  Lordship,  I  would  like  to  ask 
Mr.  Neely,  and  that  is  if  this  would  represent  the  conditions  as  the  company  has 
found  them  in  Canada  since  the  introduction  of  the  Compensation  Acts  in  the 
different  Provinces  that  are  modelled  somewhat  along  the  lines  of  the  British  Act. 
It  says  here  speaking  about  Europe  particularly  that,  "it  is  everywhere  testified 
by  Government  authorities,  by  employers,  employees,  and  managers  of  insurance 
■companies,  that  the  introduction  of  bills  for  the  workmen's  compensation  for 
industrial  accidents  was  at  first  a  very  disturbing  element  owing  to  the  fact  that 
the  insurance  companies  had  no  accurate  knowledge  of  the  hazards  they  were 
asked  to  cover. 

"  While  at  first  great  difficulties  arose  about  proper  rates  of  premiums,  and 
others,  not  so  serious  about  accommodating  the  policies  of  companies  to  the  new 
conditions,  the  general  result  of  the  legislation  has  been  good,  and  in  nothing 
is  this  more  evident  than  in  its  effect  upon  employers'  liability  insurance.  Thus, 
a  materially  larger  proportion  of  the  premiums  paid  by  employers  is  now  directly 
applied  to  the  indemnification  of  employees.  This  includes  reserves  which  must 
necessarily  be  set  up  to  meet  the  unexpired  liability  under  the  policies,  the  accrued 
but  unmatured  liability  for  annuity  payments  to  dependants  or  to  those  totally 
disabled,  and  periodical  sums  remaining  to  be  paid  on  account  of  temporary  dis- 
abilities. In  fact  the  percentage  of  claims  to  premiums  varies  from  60  per  cent. 
to  as  high  as  70  per  cent,  or  even  75  per  cent,  instead  of  from  40  per  cent,  to 
50  per  cent,   as  previously." 

Mr.  Neely:     I  think  that  is  the  tendency. 

Mr.  Wegenast:  This  refers  to  the  passing  of  the  Workmen's  Compensation 
Acts. 

Mr.  Bancroft:  In  the  percentage  of  claims  after  the  passing  of  the  legisla- 
tion to  which  we  have  all  been  referring,  which  is  English  legislation,  they  vary 
now  from  60  to  as  high  as  75  per  cent.,  whereas  formerly  under  the  employers' 
liability  insurance  they  were  only  40  to  50  per  cent. 

Mr.  Neely  :  Yes,  we  find  in  the  Provinces  where  there  are  Compensation 
Acts  the  money  that  reaches  the  workman's  hands  is  a  much  greater  per  cent. 
than  under  the  old  conditions. 


244  MINUTES  OF  EVIDENCE:  No.  65- 

-    -  , 

The  Commissioner:  Do  you  find,  Mr.  Neely,  where  those  Acts  are  in 
force  that  you  deal  more  often  directly  with  the  injured  man  than  with  the 
lawyer  ? 

Me.  Neely:     Ye®. 

Mr.  Meredith:     In  the  Brotherhood .  of  Trainmen  we  have  nearly  120,000 
men  insured,  and  I  can  go  hack  a  great  number  of  years.     We  used  to  pay  $2 
a  month;  which  would  be  $24  a  year.     We  used  to  insure  a  man  for  $1,350,  and 
we  never  paid  any  more  than  $2  into  the  insurance,  and  that  was  able  to  main- 
tain an  insurance  against  death  and   against  total  disability  for  railroad  work. 
That  is,  if  a  man  took  consumption,  or  if  he  got  sick  in  any  way  so  that  he  couldn't 
follow  his  occupation,  he  would  get  this  $1,350,  and  if  he  lost  a  hand  or  a  foot 
he  was  entitled  to  the  same  thing.     If  he  lost  his  eyesight  he  would  get  it.     Now, 
we  have  never  found  any  difficulty  in  keeping  that  up,  and  last  year  or  the  year 
before  last  we  were  able  to  increase  that  indemnity  to  $1,500  instead  of  $1,350. 
We  gave  that  voluntarily.     We  found  we  were  accumulating  on  that  $24  a  year 
proposition,  and  as  you  know  we  insured  all  these  yard-men  and  men  in  the  most 
hazardous   occupations   in  the   world.     I   think   that   is   conceded.     We   feel   that 
this  thing  can  be  done  all  right,  that  there  is  no  trouble  whatever  in  carrying 
these  things  out.     We  sometimes  have  a  little  difficulty.     A  man  will  put  in  a 
claim  when  he  is  not  injured  as  much  as  we  think.     I  have  taken  a  man  to  a 
doctor  outside  of  his  own  doctor,  who  has  reported  he  was  disabled,  and  asked  him 
to  pass  upon  him,  but  it  is  very  seldom  that  we  ever  get  taken  in,  and  very  seldom 
we  turn  a  claim  down;  and  we  feel  that  could  be  carried  out  in  every  case.     I 
don't  see  if  it  can  be  carried  out  among  railroad  men,  the  very  worst  class  of 
risk,  as  I  think  our  friend  Mr.  Neely  would  say,  that  other  bodies  couldn't.     Tn 
fact,  I  recollect  the  time  they  wouldn't  insure  a  man.     If  I  wanted  to  insure  my 
life   against  accident  when   I   was  a  trainman   running   on   a   train   they   simply 
wouldn't  give  it  to  me.     They  would  give  it  to  a  commercial  traveller  or  a  man 
travelling  on  the  train,  but  they  wouldn't  give  it  to  me.     They  thought  my  occupa- 
tion was  too  hazardous  to  get  a  thing  like  that.     Now,  I  think  we  can  get  this 
thing  up.     I  think  Sir  William  is  trying  to  find  out  how  this  thing  can  be  run 
smoothly  and  for  the  interests  of  everybody,  and  I  think  that  is  only  right.     T 
don't  believe  in  pressing  another  man  to  increase  my  riches  or  the   amount   of 
liability  for  myself.     I   have  always  been   one  that  has  said  that  a  man  should 
take  his  own  liability.     That  is  one  of  the  troubles  we  find  amon?  the  working- 
men.   to   assume   the   liability,   to   come    into    the   Brotherhood   of   Trainmen    for 
instance.     We  have  a  job  to  persuade  men  in  their  best  interests,  and  yet  when 
they  come  in   they  feel  perfctly  satisfied   it   is  for  their  best  interests.     I  don't 
know  how  Mr.  Neely  would  look  upon  that  payment,  that  is  that  $1,500,  and  assume 
all  those  liabilities,  in  the  case  of  switchmen   and  brakemen   and   conductors — I 
don't  know  whether  that  rate  is  higher  than  his  rate.     I  can  hardly  figure  it  out 
on  the  basis  you  put  it  on,  but  we  were  able,  as  I  say,  to  give  another  $150  more 
than  we  were  giving,  simply  on  a  flat  rate  paid  every  month. 

Mr.  Neely:  Of  course  our  rates  are  never  blanket  rates  in  the  form  that 
you  describe.  Our  rates  are  based  upon  the  hazard  in  each  occupation.  I  couldn't 
say  without  some  little  calculation  just  what  the  average  cost  would  be  to  train- 
men, for  the  yardmen  and  the  freight  brakemen,  which  is  the  highest,  down  to 
the  passenger  conductor.  There  is  a  very  wide  difference  in  the  rate,  and  just 
what  the  average  would  be  if  they  all  came  in  I  could  not  say  without  some 
calculation. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  215 


The  Commissioner:  What  is  the  highest,  Mr.  Neely,  in  the  case  of  yard 
brakemen? 

Mr.  Neely:    The  rate  is  $27  a  year  I  think  for  $1,000  of  insurance. 

Mr.  Meredith  :    We  give  $1,500  and  pay  $24  a  year,  and  we  are  accumulating 

money. 

The  Commissioner  :     You  must  take  the  low  in  as  well. 

Mr.  Meredith  :     Ours  are  all  high. 

The  Commissioner:     Doesn't  it  include  the  conductors? 

Mr.  Meredith:  No,  the  conductors  have  a  rate  of  their  own.  They  pay 
a  little  less  than  the  brakemen  or  switchmen. 

Mr.  Neely:    A  freight  conductor  would  be  $15  for  $1,000. 

Mr.  Meredith  :     That  is  something  similar. 

Mr.  Wegenast:  I  see  the  rate  under  the  New  York  law  was  $10  for  train- 
men, steam  railways. 

Mr.  Kingston:     It  is  straight  accident  insurance. 

Mr.  Neely:     The  passenger  conductor  I  think  would  be  $10. 

Mr.  Kingston:  Is  it  true  in  practice  the  liability  companies  do  not  carry 
the  risk  for  any  steam  railway? 

Mr.  Neely:     For  the  public? 

Mr.  Kingston  :     For  the  public,  or  employees. 

Mr.  Neely:     I  think  they  carry  it  themselves,  as  far  as  I  know. 

Mr.  Kingston  :  So  there  are  practically  no  statistics  on  which  one  could 
form  a  conclusion  in  that  business? 

Mr.  Neely:     No. 

Mr.  Meredith:  In  the  Grand  Trunk  every  man  is  insured,  and  it  varies. 
Sometimes  I  am  insured  in  the  $500  grade  and  sometimes  it  comes  down  and 
my  monthly  payment  will  be  40  cents.  That  is  the  very  lowest,  but  it  very 
rarely  goes  higher  than  80  cents.  That  is  for  $500.  $1,000  would  be  of  course 
just  about  double  that,  and  you  can  go  up  as  high  as  $2,000. 

The  Commissioner:  What  would  you  think,  Mr.  Bancroft,  of  the  Italian 
scale  of  remuneration,  $400  isn't  it, 

Mr.  Bancroft  :  Of  course,  your  Lordship,  in  assessing  all  these  payments 
of  the  different  countries  we  have  to  recognize  the  fact  that  the  wages  and  cost  of 
living  vary  considerably. 

The  Commissioner  :     The  scale  of  living  is  perhaps  more  in  some  countries. 

Mr.  Bancroft  :  And  you  know  the  wages  vary.  Wouldn't  that  be  true,  Mr. 
Neely,  where  you  have  information  about  insurance  in  the  various  countries,  you 
find  the  wages   of  the   workmen   are   considerably  different. 

Mr.  Neely  :     Yes,  it  makes  a  great  difference. 

Mr.  Bancroft  :  I  was  looking  up  some  months  ago  the  telephone  wiremen, 
and  their  wages  in  Sweden,  I  believe,  are  only  about  one-third,  I  think,  of  what 
they  are  in  Canada.     It  would  make  a  tremendous  difference  in  Sweden. 

Mr.  Wegenast  :     The  insurance  would  be  so  much  higher. 

The  Commissioner:  Are  you  able  off-hand  to  sa}r,  Mr.  Neely,  how  the 
wages  in  England  compare  with  the  wages  in  Ontario? 

Mr.  Neely  :  I  could  hardly  answer  that.  I  have  had  nothing  to  do  with 
the  English  insurance  except  as  I  would  have  it  from  our  people. 

Mr.  Wegenast  :     The  higher  the  wages  the  lower  the  premium  rate. 

Mr.  Neely  :  Of  course  the  premium  rate  is  applied  to  the  wage.  The 
higher  the  percentage  of  indemnity  of  course  the  higher  the  rate.     In  England 


246  MINUTES  OF  EVIDENCE:  No.  65 


the  scale  is  half  wage,  and  the  maximum  is  a  pound  a  week.  In  British  Columbia 
it  is  half  wage,  and  the  maximum  is  $10  per  week.  Now,  we  find  in  British 
Columbia  a  very  peculiar  condition  existing.  Most  of  the  workmen  in  British 
Columbia  receive  more  than  $20  a  week  in  the  skilled  trades,  and  a  man  receiving 
say  $25  a  week  or  $27  a  week  does  not  care  very  much  for  $10  a  week  indemnity, 
and  when  his  first  two  weeks  are  eliminated  there  isn't  the  same  inclination  to 
make  a  claim  under  the  Workmen's  Compensation  Act  that  there  would  be  if  he 
had  a  fair  measure  of  damage,  and  that  seems  to  be  a  hardship  in  British  Columbia, 
and  I  think  it  has  militated  against  the  success  of  the  act.  If  they  had  a  limita- 
tion that  allowed  a  larger  percentage  of  cases  to  come  within  the  half  wage  it 
would  be  better. 

The  Commissioner:     Does  that  mean  that  a  man  goes  back  to  work  sooner 
than  he  should? 

Mr.  Neelt  :     No,  it  means  he  is  more  inclined  to  take  his  chances  at  common 
law  or  employers'  liability. 

Mr.  Waldron  :    I  see  in  one  of  the  European  countries  that  the  total  indem- 
nity is  fixed  as  an  annuity  equal  to  30  per  cent,  of  the  average  savings  of  the 
man  for  his  lifetime — the  average  wages.    Would  that  be  a  good  indemnity? 
The  Commissioner:     I  don't  see  how  you  could  work  that  out. 
Mr.  Waldron  :     An  annuity  the  value  of  which  would  be  calculated  as  30 
per  cent,  of  his  average  wages. 

The  Commissioner:  That  would  be  an  annuity  for  his  probability  of  life, 
capitalized  ? 

Mr.  Waldron:  Yes,  they  capitalize  it  apparently.  They  might  capitalize 
it  as  30  per  cent,  of  his  wages  during  his  expected  life. 

Mr.  Kingston:  The  Washington  system  would  be  an  improvement  on  that, 
where  they  put  $4,000  as  a  maximum,  but  it  is  based  upon  the  American  table 
of  mortality  as  adopted  by  the  insurance  companies,  the  amount  being  ascertained 
by  taking  $20  a  month  and  capitalizing  it.  Of  course  the  amount  would  be  greatly 
lessened  as  the  age  of  the  injured  or  deceased  was  greater. 

Mr.  Wegenast:  The  capitalized  value  is  arbitrarily  fixed  at  the  age  of  30 
years.  They  take  the  capitalized  value  of  an  annuity  of  $20  of  a  person  aged  30 
years.     Then  they  take  their  chance  of  the  age  being  higher. 

Mr.  Kingston:  If  a  person  was  killed  who  was  under  30  years  of  age  there 
would  be  a  possibility  of  getting  $4,000  ? 

Mr.  Wegenast:  Yes,  a  little  more  than  $4,000,  and  a  diminution  if  the 
man  was  50  years  old. 

Mr.  Kingston:  Then  it  would  probably  not  amount  to  more  than  $1,500  or 
$2,000. 

Under  the  British  Columbia  Act  which  Mr.  Neely  has  spoken  so  much  about, 
the  system  there  is  that  an  action  is  a  sort  of  drag  net  action.  They  can  claim  in 
one  writ  under  all  three  systems,  and  if  they  fail  on  the  one  which  gives  the  great- 
est remedy  possible,  they  can  hang  on  to  the  next  one,  and  if  they  fail  on  that  one 
they  are  sure  to  stick  on  the  Compensation  Act  which  gives  a  certain  remedy. 

Mr.  Wegenast:  That  is  practically  the  English  Act  under  which  if  a  man 
sues  at  common  law  he  can  still  have  his  compensation  assessed  under  the  Act, 
with  some  penalty  in  the  matter  of  costs. 

Mr.  Kingston:  In  British  Columbia  it  goes  further  than  that.  You  SHe 
under  one  action,  claiming  under  the  common  law,  but  if  you  fail  under  that  you 
can  claim  under  the  original  workmen's   Compensation   Act  which   is   similar  to 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  247 


our  present  act,  and  if  you  still  fail  in  that  then  you  can  come  under  the  new 
Compensation  Act. 

Me.  Wegenast:     I  think  that  is  the  same  as  in  England. 

The  Commissioner:  Under  our  law  the  dependants  in  the  case  of  a  fatal 
accident  would  not  be  limited  as  they  are  here,  in  the  Washington  Act.  If 
a  widow  or  an  invalid  widower  survive,  a  monthly  payment  of  $20  shall  be 
made  throughout  the  life  of  the  surviving  spouse  to  cease  at  the  end  of  the  month 
at  which  remarriage  shall  occur,  and  the  surviving  spouse  shall  also  receive  $5  a 
month  for  each  child  until  the  child  reaches  the  age  of  16,  but  the  total  monthly 
payments  under  this  paragraph  shall  not  exceed  $35.  Now,  under  our  law  they 
might  get  a  great  deal  more  than  that. 

Me.  Wegenast:     Not  more  than  $20  to  $35  a  month. 

The  Commissioner:     They  might. 

Me.  Kingston:  Capitalize  that  and  you  get  a  good  deal  more  than  our  law 
would  give. 

The  Commissionee  :     That  would  depend  on  the  age  of  the  surviving  spouse. 

Me.  Kingston:     Does  it? 

The  Commissionee  :  No,  but  it  would  in  this  country  under  a  fatal  accident. 
The  capital  amount  she  would  get  as  a  dependant  would  be  less  the  older  she  was, 
of  course. 

Me.  Neely:  The  point  that  the  insurance  companies,  and  apparently  the 
legislators,  overlooked  in  dealing  with  the  Quebec  Act,  and  I  may  say  with  the 
French  Act,  was  the  actual  value  of  these  annuities.  They  did  not  realize  that  the 
small  sum,  $5  a  week,  on  a  person  say  under  $30,  being  capitalized,  amounts  to  a 
very  large  figure.  The  $5  a  week  in  itself  seemed  to  be  very  small,  but  when 
you  capitalize  these  sums  and  pay  them  off  the  total  cost  of  the  compensation  is 
enormous.  Our  company  started  to  do  business  in  France  at  the  time  that  the 
French  Act  became  effective,  and  the  rates  were  advanced  very  radically,  three 
times,  and  to-day  no  insurance  company  is  doing  business  in  France,  it  has  become 
such  a  burden. 

Me.  Waldeon:     The  State  does  everything? 

Me.  Neely  :  Yes.  In  Quebec  the  same  thing  occurred,  although  we  have 
not  seen  the  outcome  of  it ;  we  have  only  been  doing  it  for  a  year. 

Me.  Wegenast  :  As  to  the  Quebec  Act  there  is  some  doubt  as  to  whether  the 
payments  cease  when  you  reach  the  limit  of  $2,000,  or  whether  they  still  continue? 
Is  that  not  the  case? 

Me.  Neely:  There  is  doubt  on  the  subject  because  the  matter  has  never 
been  decided  by  the  courts. 

Mr.  Kingston  :  Does  that  doubt  arise  under  that  section  which  says  under 
certain  conditions  of  gross  negligence  on  the  part  of  the  employer  the  $2,000  may 
be  increased. 

Me.  Neely  :  That  was  one  clause  which  rendered  it  doubtful,  but  there  is 
another  clause  whioh  makes  it  still  more  doubtful.  The  basis  of  the  act  is  an 
annuity.  It  speaks  of  annuities  throughout.  Then  it  speaks  of  the  capital  of  the 
annuities  and  it  is  so  inconsistent  to  say  a  person  shall  be  entitled  to  an  annuity 
of  a  certain  percentage  of  the  wage,  meaning  for  the  rest  of  their  lives,  for  annuity 
means  for  the  lifetime,  and  then  say  it  should  be  capitalized  at  $2,000.  There  are 
several  ways  of  looking  at  it.  One  is  if  the  annuity,  we  will  say,  was  $10  a  week, 
or  say  $500  a  year,  it  would  take  a  very  few  years  to  consume  $2,000.  Then  we 
must  either  say  that  the  annuity  is  to  be  reduced  to  a  sum  which  applied  to  the 


248  MINUTES  OF  EVIDENCE:  No.  65 

expectancy  of  the  life  of  the  man  will  equal  $2,000,  which  is  a  contradiction  in 
itself,  or  we  might  say  it  is  not  an  annuity  at  all,  that  it  is  a  simple  payment  last- 
ing for  a  limited  number  of  years  until  that  $2,000  is  exhausted. 

The  Commissioner  :  Could  it  be  intended  to  give  to  the  workman  the  right 
to  elect  to  take  the  $2,000  in  lieu  of  the  annuity? 

Me.  Neely:  There  is  nothing  in  the  act  to  permit  the  workman  to  accept 
the  capital  sum.  The  workman  may  in  case  of  permanent  disability  apply  to  the 
court  to  have  a  capital  sum  paid  into  an  assurance  company  from  which  he  received 
an  annuity. 

Mr.  Meredith  :     He  could  not  get  it  without  applying  to  the  courts  ? 

Mr.  Neely  :     He  can't  get  it  in  any  event. 

The  Commissioner:  In  England  under  the  British  Act  he  can  by  leave 
of  the  court,  I  think. 

Mr.  Wegenast  :  Or  by  an  agreement  filed  I  think  he  can  get  the  annuity 
paid  to  himself  personally. 

Mr.  Neely:     Not  the  annuity,  the  capital. 

The  Commissioner:  I  do  not  think  so.  I  have  noticed  several  applications 
that  were  made. 

Mr.  Wegenast  :     That  is  within  the  discretion  of  the  County  Court  judge. 

The  Commissioner:     Yes. 

Mr.  Wegenast  :     But  there  is  provision  for  commuting. 

The  Commissioner  :  What  do  you  think,  Mr.  Neely,  would  be  the  best 
tribunal  to  determine  these  cases,  for  ascertaining  the  claim,  and  the  amount  of  it? 

Mr.  Neely  :     I  think  the  courts  by  all  means. 

The  Commissioner :     That  is  expensive,  is  it  not? 

Mr.  Neely  :  I  think  it  need  not  be  expensive  if  the  procedure  is  carefully 
prescribed  and  made  as  simple  as  possible. 

Mr.  Meredith  :  I  would  like  to  say,  Sir  William,  our  experience  of  going 
to  the  courts  is  very  bad;  what  we  call  taking  it  to  law.  I  can  cite  the  case  of  a 
man  down  on  Adelaide  street  here,  where  his  son  was  killed  by  a  car  falling  on 
him.  He  was  attending  to  the  air  brake  under  the  car,  and  the  engine  came  along 
and  knocked  it  over  and  killed  him.  It  was  on  the  Canadian  Pacific  railway  out 
at  West  Toronto  Junction.  They  offered  the  wife  something  like  $1,500,  and 
the  father-in-law  thought  that  was  rather  a  small  sum  for  the  way  in  which  it 
occurred,  on  account  of  no  fault  whatever  on  the  part  of  his  son,  and  he  took  it 
to  law.  I  was  talking  to  him  the  other  day,  and  I  think  the  widow  and  child 
got  something  like  $500  or  $600  after  everything  was  paid.  That  shows  what  it 
means  by  taking  it  to  the  courts. 

The  Commissioner:     He  should  have  taken  the  $1,500. 

Mr.  Meredith  :  I  advised  these  people,  take  whatever  is  offered  to  you,  don't 
go  and  put  it  in  the  courts,  because  you  will  get  nothing  at  all  the  chances 
are,  and  if  you  do  get  anything  it  will  be  very  little. 

The  Commissioner:  I  suppose  under  the  British  Act  ninety-nine  cases  out 
of  a  hundred  are  tried  by  the  County  Court  judge  without  a  jury,  and  there  is  no 
appeal  on  the  questions  of  fact,  only  on  the  questions  of  law,  and  judging  from  what 
Mr.  Bancroft  said  that  would  suit  the  workers. 

Mr.  Bancroft  :  But,  your  Lordship,  would  it  not  be  right  to  say  that  the 
British  Act  so  clearly  specified  what  the  county  judge  can  do,  he  can  do  very  little 
but  what  the  law  specifies,  and  there  are  very  few  appeals. 

The  Commission  i:k  :     I  think  you  will  find  nearly  half  the  cases  in  the  House 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  249 

of  Lords  have  been  workmen's  compensation  cases.  Of  course  it  is  a  new  law  and 
they  are  getting  the  points  settled,  but  it  is  surprising  the  number  of  cases  that 
go  up  on  the  questions  of  law.  It  is  a  question  of  law  whether  there  is  any  evidence 
at  all,  and  sometimes  a  judge  goes  wrong  in  determining  that  there  is  evidence 
to  show  that  the  accident  was  within  the  act. 

Mi;.  Wegenast:  Have  you  any  experience,  Mr.  Neety,  under  the  British 
Act?  Do  you  know  anything  of  the  working  out  of  it  under  the  British  Act — 
arbitration,  and  so  on? 

Mk.  Neely  :     Not  more  than  having  heard  it  discussed. 

Me.  Wegenast:  You  haven't  heard  the  strictures  of  Mr.  Logie,  who,  I 
believe,  is  your  solicitor?  You  haven't  seen  his  article  on  the  pit-falls  of  law  for 
the  litigant? 

Mr.  Neely  :     I  have  seen  them. 

Mr.  Wegenast  :  Your  solicitor  then,  in  England,  who  is  perhaps  more 
familiar  with  the  working  of  the  act  than  anybody  else,  is  not  sparing  in  his 
condemnation  of  the  adjudication  features  of  the  act.  He  does  not  condemn  the 
courts:  he  condemns  the  act  and  what  is  made  necessary  by  the  complexity  of  the 
act. 

Mr.  Waldron:  The  Italians  propose  in  regard  to  agricultural  insurance — 
they  extend  it  to  infectious  diseases,  that  is  death  caused  by  these,  contracted  by 
contact  with  the  animals  and  soil,  and  sun  strokes  and  thunder  bolts,  etc.,  classi- 
fied as  risks  of  occupation. 

The  Commissioner  :     For  which  the  employee  has  to  be  compensated  ? 
Mr.  Waldron  :     I  presume  so. 

Mr.  Wegenast:     That  is  a  State  insurance  system.     State  insurance  fixes  it 
upon  the  employer.    The  employer  pays  the  premiums  which  cover  these  risks. 
Mr.  Neely  :     Those  are  called  occupational  diseases. 

Mr.  Kingston:  The  Germans  have  worked  that  out  in  a  satisfactory  way 
so  far  only  as  the  first  two  weeks  are  concerned.  The  fund  from  which  compensa- 
tion for  those  first  two  weeks  is  taken  is  collected  by  a  contribution  of,  I  think 
it  is,  two-thirds  from  the  workmen  and  one-third  from  the  employer.  That  is  for 
the  first  two  weeks  only. 

Mr.  Bancroft  :     The  first  thirteen  weeks. 

Mr.  Kingston:  Yes.  After  that  they  automatically  switch  over  to  the  other 
fund  which  is  contributed  to  entirely  by  the  employer. 

The  Commissioner  :  There  is  nothing  in  case  it  does  not  last  for  more  than 
two  weeks? 

Mr.  Kingston  :  Yes.  That  feature  is  introduced  into  nearly  all  the  Acts 
which  are  modelled  after  the  British  Act.  In  British  Columbia,  Alberta,  Manitoba, 
Newfoundland  and  New  Brunswick  there  is  no  compensation  for  in  some  cases  the 
first  week  and  in  some  cases  two  weeks  or  ten  days. 

Mr.  Neely:  In  arranging  for  the  practical  working  out  of  such  an  Act  it 
seems  absolutely  necessary  that  there  should  be  some  short  period  during  which 
there  should  be  no  compensation,  to  prevent  malingering,  or  prevent  taking  holidays 
at  the  expense  of  someone  else,  or  anything  of  that  sort.  It  must  be  a  more  serious 
case  to  require  a  man  to  give  up  his  employment  for  two  weeks.  There  is  not  so 
much  chance  of  affecting  an  accident. 

The  Commissioner:     I  understood  from  Mr.  Bancroft  there  was  no  such 
thing  as  malingering,  that  it  did  not  exist  in  the  industrial  army. 
Mr.  Bancroft:     No,  I  think  not,  your  Lordship. 
Mr.  Mi^iedith  :     In  soldiering  we  have  known  a  man  to  cut  off  his  front 


250  MINUTES  OF  EVIDENCE:  No.  65 

finger.  That  is  a  fact.  He  has  actually  chopped  off  that  finger  himself,  so  that 
he  would  not  be  able  to  pull  the  trigger  of  his  rifle.  Now,  that  is  malingering. 
Now,  I  haven't  met  any  of  that  kind  of  thing  in  the  industrial  army.  To  say  a 
man  will  go  and  put  himself  in  a  position  to  lose  his  hand  or  his  foot  for  the  sake 
of  getting  insurance.     I  think  it  is  a  slander  on  mankind. 

Mr.  Bancroft:  I  think  Mr.  Neely  could  tell  us  in  Great  Britain,  in  the  act, 
that  there  is  a  time  specified  in  which  a  man  shall  not  receive  compensation,  but  if 
his  injury  goes  over  that  time  it  dates  to  the  first  day. 

The  Commissioner:     Yes,  there  is  no  doubt  about  that. 

Mr.  Neely:     That  is  not  objectionable. 

Mr.  Wegenast:  Would  it  from  the  accident  insurance  standpoint  do  equally 
well  if  there  were  during  that  period  of  two  weeks,  or  whatever  it  is,  a  fund  to  which 
the  workmen  contributed  to  take  care  of  the  injured  man  so  as  to  bring  home  to  the 
workmen  himself  pecuniarily  the  burden  of  malingering.  Under  the  act  of  the 
State  of  Washington  as  originally  brought  in  there  was  what  was  regarded  as  a 
penal  fund  for  the  first  two  weeks  to  which  the  employers  and  employees  contri- 
buted at  the  rate  of  two  cents  a  week  each.  They  fixed  that  arbitrarily  for  all 
occupations,  and  this  fund  was  supposed  to  take  care  of  the  injured  man  for  the 
first  two  weeks.  Would  that  from  the  insurance  standpoint  be  as  effective  in  pre- 
venting malingering  as  the  cutting  of  the  workmen  out  of  all  compensation  during 
those  two  weeks? 

Mr.  Neely  :  I  think  it  would  be  very  effective,  because  then  the  fund  would 
have  the  moral  protection  of  all  the  other  workmen.  The  main  difference  in  the 
experience  of  stock  insurance  and  mutual  insurance  is  in  that  one  fact. 

Mr.  Wegenast  :  That  is  the  feature  to  which  you  attribute  the  success  of 
mutual  insurance  as  against  stock  insurance? 

Mr.  Neely:  That  is  one  of  the  great  differences,  yes,  the  moral  protection 
of  all  workmen  against  the  man  who  attempts  to  impose  on  the  fund.  The  fund  is 
safeguarded.    The  stock  insurance  company,  or  the  employer,  has  not  that  support. 

The  Commissioner:  That  is  only  one  of  the  things.  The  way  they  are 
managed  has  a  good  deal  to  do  with  it. 

Mr.  Neely:     The  cost  of  getting  business. 

Mr.  Wegenast:     And  also  the  success  in  contesting  claims,  of  course. 

The  Commissioner:  The  British  Act  is,  if  incapacitated  less  than  two 
weeks  no  compensation  shall  be  paid  in  respect  c»f  the  first  week. 

Mr.  Kingston  :  I  think  one  or  two  of  the  provincial  acts  adopt  that  same 
provision.  I  am  under  the  impression  that  either  Alberta  or  British  Columbia, 
or  both,  have  it,  absolutely  eliminating  the  first  two  weeks. 

Mr.  Neely :  No;  Quebec  eliminates  the  first  week. 

Mr.  Wegenast:  That  again  would  have  considerable  effect  on  the  rate  be- 
cause a  large  proportion  of  the  accidents  are  for  only  temporary  injuries. 

Mr.  Neely:     Of  short  duration,  yes. 

The  Commissioner:  Surely  there  would  be  no  justice  if  the  incapacity  lasts 
for  ten  weeks  if  at  the  end  of  the  time  he  should  not  be  paid  for  it. 

Mr.  Neely:  It  would  be  perfectly  reasonable  to  pay  from  the  beginning  if 
it  lasts.  It  is  to  prevent  a  three  or  four  or  five  days  claim  of  a  man  taking  a 
short  holiday,  and  he  can  afford  to  lose  half  his  wage,  and  the  employer  has  to  pay 
the   cost,  when  he  is  suffering  from  no  real   serious  injury. 

Mr.  Wegenast:  There  would  be  this  inducement,  that  a  man  who  was  legi- 
timately ten  days  off  would  stay  in  bed  for  two  weeks  or  more  in  order  to  get  the 
whole  amount. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  251 

The  Commissioner:     Why  would  lie  stay  in  bed,  unless  he  was  a  lazy  man? 

Me.  Kingston:  With  reference  to  this  question  there  is  a  point  comes  up,  as 
to  the  wisdom  or  otherwise  of  eliminating  the  right  of  foreign  relatives  of  a 
deceased  man  to  make  any  claim  upon  the  compensation  fund.  The  system  has 
grown  up  in  this  country,  and  there  are  several  gentlemen  in  Montreal  who  thrive 
greatly  on  it,  of  taking  up  these  cases.  They  represent  the  foreign  element  in  the 
whole  of  Canada,  consuls  of  some  of  those  European  countries,  and  they  succeed 
usually  in  finding  out  a  dependent  relative  in  the  Old  Country.  No  doubt  in  many 
cases  there  may  be  foundation  for  the  claim,  but  I  should  not  think  that  there 
should  be  a  great  deal  of  sympathy  displayed  in  a  Compensation  Act  for  foreign 
relatives.  I  am  not  now  referring  to  relatives  who  are  British  subjects,  but  for 
instance  in  Eoumania  and  Bulgaria  and  Turkey. 

The  Commissioner:  Your  idea,  Mr.  Kingston,  would  be,  let  them  starve  if 
you  don't  see  them  starve? 

Mr.  Kingston  :  These  people  do  not  contribute  anything  to  these  people  in 
the  Old  Country  while  they  are  working  here,  but  as  soon  as  they  are  killed  then  a 
claim  is  bolstered  up  by  some  of  these  gentlemen  who  pretend  to  represent  the 
father  or  mother  in  the  Old  Country. 

The  Commissioner  :  Still  there  are  very  many  cases  where  these  poor 
Italians  are  working  here  and  sending  money  home  to  their  wives  and  families, 
and  it  would  be  pretty  hard  where  they  are  killed  to  refuse  any  compensation. 

Mr.  Kingston  :  I  would  limit  that  to  a  case  of  that  kind  where  the  wife 
and  dependent  children  are  living  in  Italy.  That  might  be  an  exception  that  would 
be  all  right. 

Mr.  Wegenast:  Under  the  Quebec  Act  they  do  not  get  any  compensation 
unless  they  live  in  Canada. 

The  Commissioner:  I  think  that  is  so  also  in  British  Columbia.  I  do  not 
like  the  look  of  that  kind  of  legislation. 

Mr.  Bancroft:  The  danger  that  has  arisen  from  that  part  of  the  act  in 
British  Columbia  is  that  it  has  been  decided  that  a  man's  dependants  living  in 
Manitoba,  and  the  father  or  husband  living  in  British  Columbia,  are  not  entitled  to 
compensation. 

Mr.  Kingston:     That  is  the  Manitoba  Act,  I  think? 

Mr.  Wegenast:  In  Europe  it  has  been  found  better  to  deal  with  that  by 
treaty,  because  if  you  give  the  dependants  of  an  Italian  compensation  and  the 
Italian  law  does  not  give  it  to  the  injured  Canadian  that  would  be  unfair.  Of 
course  that  is  an  extreme  case.  It  would  not  arise  between  Canada  and  Italy, 
but  it  illustrates  my  point.  It  is  considered  a  matter  of  treaty  amongst  nations,  and 
a  matter  of  getting  reciprocal  rights. 

Mr.  Doggett  :  There  is  a  matter  of  $30,000  of  claims  in  dispute  which  is 
being  taken  to  the  Privy  Council  by  the  workers  whose  relatives  are  living  outside  of 
the  Province. 

Mr.  Wegenast  :  If  the  Manitoba  law  does  not  allow  similar  rights  to  the 
residents  of  British  Columbia  there  is  no  reason  why  the  British  Columbia  law 
should  allow  it  to  residents  of  Manitoba.  • 

The  Commissioned  :  Except  to  set  them  a  good  example  so  that  they  will 
repeal  their  law. 

Mr.  Bancroft  :  It  is  a  hardship,  because  they  go  long  distances  in  the  west. 
It  is  a  distinct  hardship. 

Mr.  Kingston  :     I  think  it  is  very  provincial  to  restrict  it  as  far  as  Canadians 


252  MINUTES  OF  EVIDENCE:  No.  65 

are  concerned,  or  even  British  subjects  the  world  over.  The  point  I  raise  is  entirely 
with  respect  to  those  Southern  European  countries. 

Mr.  Doggett  :     They  might  become  naturalized  subjects  in  the  meantime. 

Me.  Bancroft  :  I  believe  the  gentleman  is  referring  to  the  danger  of  inter- 
ested parties  exploiting  it  for  profit. 

The  Commissioner  :     They  do  that  on  the  home  ground. 

Mr.  Bancroft  :  It  is  alleged  or  supposed  relations  in  these  places,  and  they 
lay  a  claim  to  compensation. 

The  Commissioner:  It  is  very  difficult  to  test  the  honesty  of  these  claims, 
and  very  expensive  to  search  it  up,  no  doubt  about  that. 

Mr.  Bancroft  :  Don't  you  think  with  the  view  that  is  being  taken  over  this 
country  by  the  workers  that  if  a  man  has  come  here  to  work  and  is  employed  and 
following  his  legitimate  occupation,  if  he  has  dependants,  they  should  be  given  com- 
pensation just  like  anyone  else  ? 

Mr.  Kingston:     If  they  reside  in  Canada. 

The  Commissioner  :  I  do  not  see  why  there  should  be  any  limit  of  that  kind 
at  all  at  present. 

Mr.  Bruce  :     The  compensation  is  simply  to  take  the  place  of  some  revenue. 

The  Commissioner  :    Of  course  that  is  the  basis  on  which  we  are  discussing  it. 

Mr.  Wegenast  :  Then  the  idea  would  not  be  to  simply  set  an  amount  of 
money  as  the  price  of  a  man's  life  and  give  it  to  his  nearest  relatives,  but  to  give 
it  to  those  who  were  really  dependent  on  him. 

The  Commissioner:     The  Washington  Act  is  a  little  different  from  that. 

Mr.  Wegenast  :  That  makes  it  clearly  contingent  upon  a  real  dependency. 
A  case  arose  there  where  a  boy  was  killed,  and  the  father  and  brother  were  earning 
good  wages  and  they  were  in  no  sense  dependent  upon  his  earnings.  The  boy  was 
18  or  20  years  old,  and,  of  course,  there  was  no  compensation  whatever.  It  is  a 
matter  I  propose  to  deal  with  in  the  statement  I  hope  to  submit  to  your  Lordship. 
It  makes  a  difference  in  the  whole  aspect  of  the  question,  whether  you  view  it 
from  the  standpoint  of  having  a  certain  amount  of  money  as  a  commutation  for 
the  injury  that  is  done,  or  whether  you  place  the  whole  scheme  on  relieving  want 
and  providing  for  dependants. 

The  Commissioner  :  I  do  not  understand  this  Washington  Act  as  you  state 
it.  There  is  nothing  about  dependency  in  the  section.  If  a  widow,  or  an  invalid 
widower  survive,  a  monthly  payment  of  $20  should  be  made  throughout 
the  life  of  the  surviving  spouse  to  cease  at  the  end  of  the  month  at  which  re- 
marriage shall  occur,  and  the  surviving  spouse  shall  also  receive  $5  per  month  for 
each  child  of  the  deceased  under  the  age  of  16  years. 

Mr.  Wegenast  :  I  was  speaking  of  the  case  of  other  dependants.  This  was  a 
son  of  19  or  20  years. 

The  Commissioner:     She  gets  $5  a  month  up  to  16. 

Mr.  Wegenast:  Not  for  the  killing  of  a  child.  Suppose  under  that  system 
a  young  man  is  killed  on  whom  no  one  is  dependent,  or  a  man  with  distant  relatives 
is  killed. 

Mr.  Bancroft:     T  think  then  the  act  provides  for  his  funeral. 

The  Commissioner:  It  is  better  if  he  has  no  relatives  if  they  are  going  to 
do  harm  to  the  man  to  kill  him. 

Prof.  Keys.  I  have  had  some  experience  in  Germany  in  the  matter  of  insur- 
ing domestias.  I  had  a  nursery  governess  there  and  I  had  to  insure  her  to  the 
extent  I  think  of  about  15  cents  a  week,  a  very  small  sum,  but  on  leaving  Leipsic 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  253 

.and  going  up  to  Nuremburg  I  did  not  pay  attention  to  the  fact  that  she  was  in- 
sured, and  the  German  government  charged  me  about  $5  in,  I  suppose  it-would  be, 
a  police  case  such  as  you  referred  to  a  little  while  ago,  because  I  neglected  to  tell 
the  Leipsic  authorities  I  was  leaving.  Of  course  I  didn't  know  the  law.  The  law 
is  very  severe  against  employers  of  domestic  servants,  as  well  as  against  employers 
of  labour  generally.  I  have  read  that  pamphlet  of  Professor  Friedensburg.  He 
was  the  head  of  the  Insurance  Department  in  Germany  for  about  20  years.  You 
doubtless  know  the  pamphlet? 

The  Commissioner:     Yes,  I  have  read  it. 

Prof.  Keys  :  That  made  a  great  sensation  while  I  was  in  Germany  last  year. 
It  was  viewed  from  very  many  different  points  of  view  by  the  Conservatives  and 
by  the  Labour  Parties,  the  latter  casting  all  manner  of  contumacy  upon  it,  while 
the  Conservatives  seemed  to  think  it  was  a  true  representation  of  the  case. 

As  to  the  difference  in  the  cost  of  living  there,  and  in  labour,  I  suppose  a  good 
illustration  would  be  that  the  street  car  men  in  Munich  get  about  $1.10  a  day,  and 
the  women  who  sweep  the  streets  get  about,  I  think,  70  cents  a  day.  They  sweep 
the  streets  there  every  night  carefully.  That  represents  a  living  wage,  and  it  would 
hardly  be  so  considered  here. 

Mr.  Wegenast:     The  compensation  is  based  on  a  percentage  on  that? 
Prof.  Keys:    Yes. 

The  Commissioner  :  Does  that  wage  provide  for  the  man  or  woman  on  as 
good  a  scale  as  the  wage  paid  here  would? 

Prof.  Keys  :  No,  those  people  do  not  eat  beef  as  a  rule.  They  have  to  live 
on  cheese. 

Mr.  Wegenast  :     They  do  not  have  bathrooms  in  their  houses. 
Prof.  Keys  :     They  have  free  baths,  of  course,  at  the  public  expense,  or  given 
by  public  citizens. 

Mr.  Meredith:     That  would  be  supported  by  the  government. 
The  Commissioner:     I  do  not  think  we  always  appreciate  what  it  means 
when  we  say  "supported  by  the  Government."     That  means  supported  by  us,  and 
if  everything  depends  upon  labour,  then  it  is   supported  by   labour  in  the  last 
analysis. 

Mr.  Waldron:  No,  everything  depends  on  the  producers. 
Mr.  Meredith  :  I  think  you  all  know  how  this  matter  of  insurance  first 
came  up.  It  came  up  about  30  years  ago.  On  the  Grand  Trunk  we  used  to  have 
men  hurt  continually,  and  every  time  that  I  would  go  and  get  my  pay  and  other 
men  would  go  and  get  their  pay  at  the  pay  car,  there  would  be  some  men  around 
with  a  subscription  for  this  widow,  or  a  subscription  for  this  man  who  was  hurt, 
and  by  the  time  you  gave  a  little  to  everybody  you  would  scale  your  pay  down 
pretty  low;  and  then  we  found  out  that  certain  men  would  not  give  anything  at 
all,  and  the  generous  ones  contributed  everything  that  was  going.  So  then  we 
really  put  pressure  on  the  Grand  Trunk  to  start  the  insurance  scheme,  and  from 
that  time  it  has  gone  on.  Then  we  started  the  Trainmen's,  and  the  Order  of 
Eailroad  Conductors.  We  started  them  as  mutual  concerns,  and  really  you  would 
be  surprised  how  hard  it  is  to  get  a  man  to  pay  a  few  cents  in  to  help  himself. 

The  Commissioner:  It  is  hard  to  get  him  to  make  the  other  fellow  put 
in  a  few  cents  to  help  him? 

Mr.  Meredith:  It  is.  It  is  a  battle  all  the  way  through.  We  are  battling 
here  to  get  something  that  will  benefit  everybody,  as  far  as  we  can.  That  is  a 
pretty  hard  proposition.  In  Cleveland,  a  city  of  600,000,  the  charities  are  kept 
up  by  about  a  few  hundreds  of  those  who  really  do  anything.  That  is  the  generous 


254  MINUTES  OF  EVIDENCE:  No.  6S 

people  who  keep  all  these  poor  are  just  a  select  few  that  have  a  little  kindness  of 
heart  to  do  this  thing. 

Mr.  Wegenast:  But,  Mr.  Meredith,  you  don't  suppose  this  workmen's  com- 
pensation is  on  the  basis  of  charity? 

Mr.  Meredith  :     No,  I  do  not. 

Mr.  Wegenast  :  We  want  to  place  it  on  the  basis  of  insurance  and  I  suppose 
you  simply  want  a  square  deal. 

Mr.  Meredith:     That  is  right. 

Mr.  Wegenast  :  You  want  nothing  more  than  is  coming  to  you  as  your 
share  ? 

Mr.  Meredith:     I  don't  expect  to  get  anything  personally. 

Mr.  Waldron:  That  is  a  curious  ground  to  take,  to  say  insurance  of  that 
kind  is  a  square  deal.  I  don't  know  how  you  will  arrive  at  it.  Are  you  able  to- 
state  any  principle  of  philosophy  on  which  you  base  the  act?  There  are  schemes 
to  help  distress,  and  this  is  one  scheme  to  help  it.  Then  the  insurance  comes 
up  as  old  age  insurance,  or  sickness  insurance,  or  the  insurance  of  the  farmer  who 
has  failed  in  his  business  ox  is  threatened  with  the  poorhouse.  You  see  that  is 
where  he  is  going  now.  You  go  to  the  county  of  Huron  or  Middlesex  and  you 
find  farmers  who  were  well  off  and  who  have  met  with  disasters  now  livinsr  in 
the  poorhouse,  and  have  no  insurance  of  any  kind  because  they  have  never  been 
able  to  pay  it,  and  have  no  means  to  enforce  it  and  have  never  thought  of  saying 
"this  is  our  right."     That  is  what  offends  the  producing  class. 

Mr.  Wegenast  :  I  must  say  I  agree  to  a  certain  extent  with  Mr.  Waldron's 
point  of  view,  and  he  misunderstands  me  when  he  makes  that  reflection.  It  is 
hased  on  both  principles.  It  is  a  matter  of  relieving  distress,  of  course,  but 
when  you  come  to  the  means  by  which  the  distress  is  to  be  relieved  I  don't  know 
that  it  is  out  of  the  way  at  all  for  the  workman  to  say  that  he  wants  nothing  more 
than  what  is  really  coming  to  him. 

Mr.  Meredith  :     That  is  right. 

The  Commissioner:  Surely,  Mr.  Waldron,  you  are  overlooking  a  large  part 
of  the  principle  of  this  workmen's  compensation.  The  present  law  simply  indemni- 
fies the  employee  for  the  wrong  that  has  been  done  by  his  employer. 

Mr.  Waldron  :     Quite  so. 

The  Commissioner  :  What  is  asked  is  to  extend  it  a  little  further.  The 
proposition  is  to  protect  him  from  the  risks  incident  to  his  occupation,  and  to 
that  extent  it  may  be  eleemosynary. 

Mr.  Waldron:     Whether  there  is  negligence  or  carelessness? 

The  Commissioner:  That  is  the  ground  on  which  in  some  of  the  States, 
I  suppose,  it  is  unconstitutional? 

Mr.  Waldron:     Yes. 

Mr.  Bancroft:  I  might  say  to  Mr.  Waldron  that  for  years  now,  T  think 
I  would  be  right  in  saving,  that  labour  has  pointed  out  to  the  farmer,  practically 
speaking,  that  be  was  hardly  an  employer,  that  he  was  a  producer,  and  liable  to 
the  same  conditions  as  are  liable  to  the  workmen.     The  farmer  is  a  producer. 

The  Commission kr  :  You  didn't  get  him  to  come  in?  You  invited  him  into 
partnership  and  he  did  n't  come. 

Mr.  Bancroft:  Still  we  have  had  a  representative  at  our  meetings.  We 
had  Bobcrt  Owens.. 

Mr.  Wegenast:  You  have  no  representative  of  farm  labourers,  I  think? 

Mr.  Doggett:     There  is  in  Britain. 

Mi;.   Waldkon:   For  instance  take  me.       I  am   a   lawyer  and,  as  I  put  it 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  255 

earlier  in  the  evening,  I  meet  with  an  accident,  and  wife  and  children  fall  into 
anguish  and  cry  out  for  bread.  Where  are  we  to  get  our  rights  that  we  are 
entitled  to  from  society?     You  are  not  bothering  your  heads  about  us. 

Mr.  Bancroft:  We  always  fancy  from  our  experience,  and  we  have  some 
very  good  lawyer  friends,  and  some  associated  in  our  work,  but  we  always  found 
they  were  thoroughly  capable  of  taking  care  of  themselves. 

Mr.  Waldron  :  Well,  we  see  statements  made  to  the  contrary.  You  see 
there  is  the  statement  made  that  lawyers  generally  over  the  Province  are  not 
getting  a  thousand  dollars  above  their  office  expenses,  and  they  are  liable  to  meet 
with  disaster  too. 

Mr.  Bancroft:  Mr.  Waldron,  I  wanted  to  point  out  the  great  difference 
that  exists  now,  for  instance,  from  when  first  the  employers'  liability  law  came 
into  force.  There  was  a  different  state  in  society  than  there  is  now.  You  know 
probably  better  than  I  do  the  development  of  machinery  in  the  last  50  years  all 
over  the  world.  There  was  a  time  when  a  man  used  his  own  tools  and  did  his 
own  work. 

Mr.  Waldron:     Take  the  farmer  for  example. 

Mr.  Bancroft  :  Just  a  moment.  We  still  have  the  old  law  where  a  man 
can  claim  for  damages,  but  now  in  the  complex  industries,  where  there  are  big 
machines  and  the  risks  are  so  great,  we  claim  it  is  a  right  that  the  workmen  have 
to  protection  by  legislation,  and  if  not  protection  by  prevention  of  accidents  then 
for  some  measure  of  relief  to  the  dependants  of  those  injured  in  industries. 

Mr.  Waldron  :  You  would  get  that  by  making  your  legislation  a  personal 
obligation  on  the  employer  and  the  owner  of  the  machines,  so  that  he  does  not 
become  guilty  of  what  society  considers  negligence  towards  those  he  employs. 

The  Commissioner  :  I  think  statistics  show  that  something  over  30  per 
cent,  of  the  accidents  are  due  to  the  fault  of  nobod}^  or  perhaps  nearly  40  per  cent. 

Mr.  Waldron:  The  statistics  show  that  27-1  people,  I  think,  die  on  the  farms 
from  injuries.  I  don't  know  how  they  are  classified.  There  would  be  the  goring 
of  bulls  and  slipping  on  the  ice  and  falling  limbs  of  trees,  and  runaway  horses, 
and  automobiles,  and  so  on.  Now,  these  people  surely  are  in  your  words  incurring 
these  risks  ?  They  are  the  owners  of  farms  with  small  equities,  it  may  be.  They  are 
getting  no  reward  from  society,  and  they  are  making  no  claim,  and  they  are 
listening  to  you  making  this  demand  of  a  right  that  you  are  entitled  to.  You 
say  "  We  are  demanding  our  rights." 

Mr.  Bancroft  :     Sure. 

Mr.  Waldron:     That  is  an  important  part. 

Mr.  Bancroft  :  I  think  in  the  State  of  Washington  Act  every  employee  on 
the  pay-roll  is  covered.     It  is  on  the  yearly  pay-roll  I  understand  in  Washington. 

Mr.  Wegenast:     On  the  farm? 

Mr.  Bancroft  :  No,  not  a  farmer.  The  total  wage-roll  is  taxed  and  it  doesn't 
matter  what  the  man's  salary  is. 

The  Commissioner  :  It  says  an  individual  employer  or  any  member  or 
officer  of  any  corporate  employer  who  shall  be  carried  on  the  pay-roll  at  a  salary 
or  wage  not  less  than  the  average  salary  or  wage  named  in  such  pay-roll  and 
who  shall  be  injured  shall  be  entitled  to  the  benefit  of  this  act  as  and  under  the 
same  circumstances  and  subject  to  the  same  obligations  as  the  workman. 

Mr.  Bancroft  :  If  the  farmer  who  is  really  a  working  employer  has  to  pay 
any  measure  of  taxes  then  he  should  come  under  the  Compensation  Act  just  the 
same. 


256  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Waldron  :  That  is  to  say  he  should  be  indemnified  out  of  the  State 
funds,  collected  from  himself  and  other  farmers. 

Me.  Bancroft:     Why  not? 

Me.  Wegenast:  The  point  I  wanted  to  emphasize  is  that  Mr.  Waldron's 
argument  goes  to  the  root  of  the  whole  scheme  of  workmen's  compensation. 

Me.  Waldeon  :  No,  it  doesn't.  I  am  not  arguing.  I  am  getting  enlighten- 
ment. 

Me.  Wegenast:  Assuming  the  worker  in  industrial  pursuits  has  a  right, 
morally  or    whatever  it  may  be,  to  be  indemnified  when  he  is  injured — 

Me.  Waldeon:     He  has  a  right  to  invoke  the  law. 

Me.  Wegenast  :  That  would  only  provide  for  a  small  percentage  of  the 
accidents  that  happen.  Forty  or  fifty  per  cent,  are  purely  accidental  and  are  not 
due  to  any  one's  negligence,  and  you  can't  cover  those  by  anything  short  of  a  work- 
men's compensation  law. 

Me.  Waldeon:    You  can't  cover  them  at  all.    We  are  not  indemnified. 

Me.  Wegenast  :  Assuming  that  a  Workmen's  Compensation  Act  is  right  in 
principle  you  would  not  surely  make  a  distinction  between  the  farm. worker  and 
the  worker  in  any  other  occupation.  For  instance,  two  immigrants  come  to  this 
country  and  one  takes  a  position  in  a  factory  and  the  other  a  job  on  the  farm. 
One  is  injured  by  a  machine  and  the  other  is  gored  by  a  bull  on  the  farm.  Is 
there  any  reason  why  the  man  who  is  gored  by  the  bull  should  not  be  indemnified 
any  more  than  there  is  that  the  man  who  is  hurt  by  the  machine  should  not? 
On  the  assumption  that  workmen's  compensation  is  correct  the  farmer  should  be 
included.  .  ;,-"s]|| 

Me.  Waldron  :     What  do  you  mean  by  a  farmer  ? 

Me.  Wegenast  :  A  farm  labourer. 

Me.  Waldeon  :     It  is  the  principle  on  which  these  gentlemen  are  going. 

Me.  Wegenast  :  Would  you  assent  to  my  proposition  that  if  the  industrial 
worker  is  compensated  the  farmer  should  be  compensated? 

Me.  Waldeon  :  I  admit  without  any  hesitation  at  all  that  there  are  accidents 
of  life  occurring,  not  only  to  the  labourers  in  factories  and  the  labourers  represented 
by  you  gentlemen  here,  but  in  every  profession  and  every  walk  in  life,  with  no 
relief,  and  nobody  here  advocating  redress  for  them,  but  you  are  advocating  for 
these  gentlemen  redress. 

Me.  Wegenast:  The  distinction  that  Mr.  Waldron  fails  to  observe  is  in 
the  position  of  the  wage  earner,  and  what  the  French  call  entrepreneur, — a  man 
who  is  running  a  business  for  himself. 

Mb.  Waldron  :  If  a  man  directs  his  employee  to  work  at  a  machine  that  is 
dangerous  or  is  not  properly  equipped  then  the  entrepreneur  ought  to  be  liable. 
Of  course  one  sees  that  readily. 

The  Commissionee  :  If  you  have  a  system  of  State  insurance  what  possible 
defence  is  there  for  not  putting  in  the  employer  if  he  is  working  on  the  same  foot- 
ing as  the  employee. 

Me.  Wegenast  :     Because  he  is  in  a  position  to  take  the  profits. 

The  Commissioner:     What  difference  does  that  make? 

Mr.  Meredith  :     He  makes  the  difference. 

The  Commissioner:  If  there  is  no  negligence  upon  his  part  the  workman 
is  compensated.  If  you  look  at  it  logically  why  should  not  the  employer  be  com- 
pensated?    Why  should  not  the  State  pay  him? 

"Mi;.  Wi<;i:\\st:     If  it  is  a  matter  of  State  insurance. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  257 

The  Commissioner  :  He  is  going  about  his  business  and  a  wheel  breaks  and 
strikes  him  and  kills  him.     Has  he  not  got  just  as  good  a  moral  claim? 

Mr.  Wegenast:     On  the  grounds  of  State  indemnity. 

Me.  Waldkon:  You  see  socialistic  ideas  are  propagated  and  they  work 
out  in  these  assertions  which  you  gentlemen  make  in  a  way  which  shocks  me,  not 
only  as  a  representative  of  the  farmers  but  as  a  member  of  society.  I  saw  it  in 
the  papers  and  I  was  amazed  that  Ontario  was  listening  to  statements  such  as 
these.  We  have  heard  them  made  by  socialists  in  Paris  and  in  Berlin,  but  to  find 
here  in  Ontario  men  are  saying  that  they  demand  to  be  relieved  of  what  everybody 
else  must  put  up  with,  is  surprising., 

Me.  Banceoft:  I  don't  think  that  would  be  a  right  inference  for  you  to 
draw  from  anything  that  has  been  presented  to  his  Lordship  in  Toronto.  If  you 
refer  to  something  else  that  is  a  different  matter.  If  you  search  the  records  of 
what  we  have  placed  before  his  Lordship  in  Toronto  as  to  the  evidence  of  the 
legislation  in  other  countries,  irrespective,  mind  you,  of  the  opinions  that  we  may 
otherwise  hold,  I  think  his  Lordship  will  agree  with  me  that  the  words  you  have 
used  do  not  apply  to  any  representations  that  have  been  made  here.  We  have 
stated  the  case  clearly,  and  pointed  out  the  truth  and  everything  else  in  accordance 
with  what  we  consider  fair  play  to  the  workers.     That  is  right,  your  Lordship  ? 

The  Commissioner:     I  think  so. 

Mr.  Waldron:  I  find  that  public  opinion  has  gone  a  long  way  in  passing 
legislation  of  this  kind.  If  I  found  Sir  William  Meredith  giving  countenance  to 
your  assertion  that  would  be  influential.  If  you  appealed  to  my  feelings  they 
would  be  influential,  but  that  is  not  good  reasoning. 

Mr.  Meredith:     That  is  from  your  standpoint. 

Mr.  Waldron  :     As  a  thinking  man  it  does  not  convince  me. 

Prof.  Keys:  The  German  point  of  view  is  that  it  makes  for  the  efficiency 
of  the  nation. 

Mr.  Waldron  :  I  am  not  touching  that.  It  might  be  a  good  thing  to  devote 
all  my  attention  and  for  all  of  us  to  contribute  to  labour  and  answer  the  demands 
that  are  made  here;  it  may  be  right  to  contribute  to  the  welfare  of  this  nation, 
but  you  make  economic  conditions  so  unbalanced  that  people  leave  the  land. 

Prof.  Keys  :     In  Germany,  of  course,  agricultural  labour  has  the  same  right. 

Mr.  Kingston:  Would  you  consider  it  right,  Mr.  Waldron,  that  30  or  40 
per  cent  of  the  industrial  workers  who  meet  with  accidents  for  which  nobody  is 
to  blame  under  the  principles  of  law  as  we  understand  them  now  should  be  made 
the  subjects  of  charity,  as  must  necessarily  be  the  case  if  they  have  not  been  able 
to  lay  anything  aside  for  themselves,  rather  than  the  opposite  view  that  the  cost 
of  these  occupational  accidents,  including  those  that  happen  as  a  result  of  no  man's 
fault,  should  not  fairly  enter  into  the  other  costs,  or  be  placed  alongside  of  the 
other  costs  so  that  the  product  will  bear  the  whole  cost? 

Mr.  Waldron  :  Should  be  distributed  over  everything.  If  you  come  to  me 
saying  hitherto  you  have  been  calling  it  charity.  You  have  poorhouses  to  take 
the  most  hopeless  of  us,  you  have  homes,  and  you  have  institutions,  and  associations 
of  charity  and  kindness,  and  so  on,  but  we  propose  to  eliminate  that  now  and  put 
it  in  an  orderly  way;  we  propose  to  shoulder  upon  industry  and  distribute  evenly 
over  industry  a  regular  charge  for  that  purpose — if  you  say  that,  I  say,  well,  the 
only  objection  is  that  I  don't  see  why  you  are  specially  entitled  to  that  when  I 
see  about  me  all  sorts  of  people  who  are  suffering  the  same  wrongs,  whose  accidents 
are  undiscovered  and  the  causes  are  undiscovered,  and  there  is  no  remedy.  You  see 
it.     We  all  know  it.     So  if  you  say  not  that  we  demand  it,  but  you  say  give  us 

17  L. 


258  MINUTES  OF  EVIDENCE:  No.  65 

this  now  and  we  will  give  to  the  lawyer,  to  the  poor  widow,  to  the  poor  unmarried 
woman  who  takes  consumption,  and  to  all  the  rest  of  the  unfortunates  and  derelicts 
and  injured  persons,  and  give  them  the  same  thing — shoulder  them  all,  you  arrive 
logically  at  a  state  of  socialism,  which  you  acknowledge  now. 

The  Commissioner:  Haven't  we  got  a  little  way  off  the  track?  Would  you 
not  logically  make  it  improper  to  make  me  pay  as  I  do  $120  school  tax  when  I 
don't  have  any  children? 

Mr.  Waldron:  Put  that  on  Mr.  Keys'  grounds,  the  welfare  of  the  nation. 
My  objection  is  to  the  principle  involved. 

The  Commissioner:  Does  it  matter  very  much  whether  it  answers  logic  or 
not,  or  what  you  call  it,  if  the  thing  is  right. 

Mr.  S.  Harris  :  Why  should  a  man  owning  a  farm,  if  he  is  hurt,  get  com- 
pensated? He  owns  it,  and  yet  he  is  working  on  it?  That  would  apply  to  the 
manufacturer.  I  am  an  employer  and  I  was  just  thinking  the  only  place  the 
money  was  coming  from  was  the  manufacturer.  I  see  now  some  chance  of  getting 
a  little  of  it. 

The  Commissioner  :  The  manufacturer  is  the  moneyed  man :  he  is  milking 
the  cow  all  the  time.  As  long  as  you  do  not  make  it  too  burdensome  upon  industry 
why  shouldn't  you  bear  these  burdens?  If  the  general  public  have  got  to  pay  it 
you  will  pay  it- 

Mr.  Kingston  :     In  the  last  analysis  they  must  pay  it. 

The  Commissioner:  There  are  some  exceptional  cases  perhaps  where  it 
does  not. 

Mr.  Meredith  :  The  under  dog  is  always  the  small  part  of  the  community. 
Now,  I  belong  to,  I  suppose,  perhaps  a  dozen  different  organizations  that  I  have 
paid  money  into  and  never  got  anything  out  of  yet,  and  whether  I  ever  will  before 
I  die  is  a  question.  I  applied  to  the  Grand  Trunk  to  commute  my  insurance,  and 
while  I  was  nearly  70  years  old  they  told  me  I  was  in  perfect  condition  to  work, 
and  they  refused  it. 

The  Commissioner:  Then  it  may  be  possible  to  have  some  evening  sittings 
next  week- 

Mr.  Wegenast:  I  understood  we  could  not  go  on  next  week,  and  I  am  not 
prepared. 

The  Commissioner:  I  was  in  hopes  we  would  be  able  to  have  some  sittings 
next  week  when  we  could  hear  Mr.  Wegenast  and  those  whom  he  wants  to  have 
heard,  but  he  says  he  will  not  be  ready  until  later  on  in  the  month.  I  have  to  go 
to  London  on  the  week  commencing  January  8th,  and  I  will  not  be  able  to  take 
the  matter  up  again  until  after  that.  If  there  is  any  branch  of  the  enquiry  that 
could  be  facilitated  by  holding  meetings  next  week,  we  will  do  so. 

Mr.  Meredith  :  I  tried  to  get  Mr.  Love  who  used  to  be  the  superintendent 
of  the  Massey-Harris  Company  here,  but  he  has  lost  his  memory  somewhat  and 
does  not  think  it  would  be  wise  for  him  to  come-     They  had  a  system  in  there. 

The  Commissioner:     We  have  got  a  statement  of  what  their  system  is. 

Mr.  Doggett:  There  was  a  question  raised  as  to  what  the  organized  trades 
unions  did  where  State  compensation  was  paid,  and  I  have  a  book  here.  I  might 
state  we  had  this  last  year  to  change  our  constitution  in  more  ways  than 
one.  We  have  had  to  change  it  even  to  the  amount  of  contribution  or  the  amount 
of  dues.  We  have  had  to  change  our  Australian  and  New  Zealand  sections  to 
comply  with  the  laws  of  those  countries.  I  think  it  has  made  a  change  of  six- 
pence a  week. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  259 

The  Commissioner:  Does  anybody  know  of  any  country  where  there  is  a 
system  by  which  the  workmen  can  contribute  to  the  funds  and  receive  a  larger  an- 
nuity or  compensation? 

Mr-  Bancroft  :  I  think  Switzerland  is  one  of  the  places  where  there  is  a 
contribution.  In  Switzerland  it  is  compulsory  insurance.  No  insurance  law  in 
operation,  but  workmen  in  all  industries  are  covered  and  the  State  pays  for  insur- 
ance. 

Mr.  Waldron:     That  is  in  the  case  of  sickness  and  old  age. 

Mr.  Bancroft:     No,  it  is  accident  insurance  purely. 

The  Commissioner:     That  is  a  straight  contribution? 

Mr.  Bancroft:  In  Austria  there  is  compulsory  contribution,  and  employers 
pay  90  per  cent,  and  workmen  10  per  cent.,  but  I  don't  see  that  they  pay  any 
more  in  benefits  than  the  other  places  where  the  employers  bear  the  burden. 

The  Commissioner  :  If  you  could  have  a  system  by  which  the  workmen  would 
get  larger  compensation,  paying  a  reasonable  sum  into  the  funds,  it  would  have  the 
advantage  of  doing  away  with  this  objection  Mr.  Neely  refers  to,  of  not  being  a 
partner  in  the  concern. 

Mr.  Bancroft:  You  see  in  Germany  they  first  of  all  brought  in  an  act 
Which  covered  invalidity  and  old  age.  Then  they  brought  in  an  act  that  covered 
sickness  and  death.  Then  they  found  out  they  had  no  compensation  for  a  straight 
injury  and  they  brought  in  a  third  piece  of  legislation  which  was  compensation 
for  injuries,  the  burden  for  which  is  borne  by  the  employer,  as  it  is  in  pretty  near 
every  other  country,  but  for  the  first  thirteen  weeks  the  fund  takes  care  of  him, 
and  after  thirteen  weeks  are  up  the  Workmen's  Compensation  Act  takes  care  of 
him. 

The  Commissioner:     During  that  thirteen  weeks  he  contributed  something? 

Mr.  Bancroft  :  Only  through  the  legislation  that  had  gone  before.  In 
Great  Britain  they  had  no  contribution,  and  necessarily  they  built  it  upon  the 
lines  of  putting  the  burden  upon  the  employer.  It  seems  to  be  the  tendency  all 
over  the  world  that  the  burden  in  Workmen's  Compensation  should  be  a  direct 
burden  upon  the  industry.  Social  insurance,  sickness,  death,  invalidity  and  old 
age  seem  a  different  matter,  and  everybody  seems  to  look  at  it  from  the  stand- 
point of  contribution. 

The  Commissioner  :     What  do  you  mean  by  social  insurance  ? 

Mr.  Bancroft  :  When  they  speak  of  social  insurance  they  speak  of  it  more 
as  a  means  whereby  the  workman  is  covered  for  sickness,  death  and  old  age  as 
well  as  accident,  and  workmen's  compensation  deals  directly  with  accidents  arising 
out  of  and  in  the  course  of  employment.  I  understand  that  is  what  we  are  consider- 
ing in  Ontario. 

The  Commissioner  :  Now,  under  this  new  law  that  has  just  been  passed  what 
effect  will  that  have  upon  Workmen's   Compensation? 

Mr.  Bancroft:     Under  this  last  act  in  England? 

The  Commissioner:  Yes.  I  understand  that  everybody  is  insured  practi- 
cally in  certain  trades. 

Mr.  Bancroft:  Well,  it  has  this  effect,  your  Lordship,  and  we  had  this 
same  thing  when  we  were  preparing  our  case,  that  to  leave  anyone  out  or  dream 
of  leaving  any  worker  out  on  our  part  was  distinctly  unfair  in  principle. 

.  The  Commissioner  :  Why  do  you  say  worker  ?  Why  is  not  anybody  that  is 
liable  to  meet  with  an  accident  just  as  deserving  of  consideration  as  a  man  that 
works  with  his  hands?     Here  is  a  Professor  from  the  University  and  he  works 


260  MINUTES  OF  EVIDENCE:  No.  65 

with  his  head,  and  if  he  in  the  course  of  his  employment  meets  with  an  accident 
why  should  he  be  out  in  the  cold?     If  you  are  logical  why  should  that  be  so? 

Mr.  Bancroft:  There  is  no  reason  why  the  working  manufacturer  should 
be  outside  of  the  Workmen's  Compensation  Act  provided  it  is  State  insurance. 
I  see  no  reason  whatever,  but  if  it  is  not  State  insurance  it  is  different.  The 
social  insurance  you  speak  of  in  Great  Britain,  the  recent  legislation,  that  is 
practically  for  the  purpose  of  insurance  against  sickness  and  death,  of 
people,  particularly  workers,  who  are  not  members  of  trades  organizations.  You 
pointed  out  at  one  of  the  sessions  that  members  of  trades  organizations  got 
sick  benefits  and  death  benefits,  and  so  on,  and  this  act  covers  everybody  and 
covers  those  people  who  are  unfortunate  in  not  having  a  real  strong  organization 
and  who  do  not  get  sickness  and  death  benefits. 

The  Commissioner:     Is  that  not  going  to  be  a  blow  to  the  trades  unions? 

Mr.  Bancroft  :     No,  that  was  sought  in  Germany,  and  it  is  not  the  case. 

Mr.  Doggett  :  Those  trade  organizations  that  already  pay  out  sick  benefits 
and  so  on,  under  the  insurance  bill  of  Britain,  the  government  is  making  arrange- 
ments with  them  to  pay  out  also  the  government  amount  for  sickness  and  benefits. 

Mr.  Bancroft:  There  was  a  committee  went  over  to  Germany  and  they  in- 
vestigated the  whole  matter  of  social  insurance  before  this  legislation  was  brought 
into  existence,  and  evidently  from  their  report  it  is  a  good  thing  all  round.  I 
think  I  heard  Professor  Keys  mention  the  fact  that  it  made  for  the  utmost 
efficiency  in  Germany. 

Prof-  Keys:  That  is  the  common  argument  in  Germany,  but  an  article  by 
Prof.  Eriedensburg,  a  gentleman  who  has  been  twenty  years  at  the  head  of  the 
system,  casts  very  great  doubt  on  it. 

The  Commissioner:  A  pessimist  would  say  that  would  be  the  very  thing 
to  make  him  go  easy;  the  State  would  look  after  those  he  left  behind. 


SIXTH  SITTING. 


Council  Chamber,  City  Hall,  London. 

Saturday,  13th  January,  1913,  3  p.m. 

The  Commissioner  :  I  will  be  very  glad  to  hear  anything  that  you  gentlemen 
have  to  say  on  this  subject.  Be  kind  enough,  when  you  get  up  to  speak,  to 
mention  your  name,  and  if  you  represent  any  organization,  say  so. 

Mr.  John  Jones,  (Builders  Exchange)  :  Just  the  builders  are  here  at  present, 
sir. 

The  Commissioner:     Are  there  any  persons  representing  the  labour  body? 

Mr.  Jones:  I  don't  think  so,  sir.  I  have  not  much  to  say.  "We  came  up  to 
get  information.  We  have  not  very  much  to  offer.  We  are  waiting  to  see  what 
is  being  done  and  then  we  might  make  a  suggestion. 

The  Commissioner:  But  that  is  what  I  want  to  hear,  what  your  views  are 
as  to  the  present  law  and  as  to  any  changes  that  should  be  made,  if  you  are  in 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  261 


favor  of  any.  What  is  asked  for  by  the  labour  organization  is  that  the  British  Act  be 
introduced,  which  makes  the  employer  liable  for  all  accidents  happening  in  the 
course  of  the  employment  or  arising  out  of  it,  unless  the  accident  is  due  to  the 
wilful  and  serious  misconduct  of  the  person  injured,  and  even  in  that  case  it 
does  not  disentitle  the  dependants  to  compensation  if  he  is  killed.  As  the  law 
now  stands  the  liability  of  the  employer  is  limited ;  some  breach  of  duty,  negligence 
or  want  of  sufficient  appliances  must  be  shown.  Under  the  British  law  the  em- 
plover  is  liable  where  the  accident  happens  in  the  course  of  the  employment  and 
arising  out  of  it,  the  theory  being  that  in  a  great  many  cases  these  accidents 
are  incidental  to  the  industry  and  that  the  industry  ought  to  bear  the  cost  of 
them,  which  means  that  the  public  ultimately  would  bear  it,  or  so  it  is  said. 

Then  they  want  also  this;  in  the  State  of  Washington  a  law  has  been  passed, 
and  it  is  the  only  one  of  this  kind  that  I  know  of,  where  the  employers  in  certain 
hazardous  enterprises  contribute  a  stated,  proportion  of  the  percentage  of  the  wage 
bill  of  the  year  to  the  State,  and  the  State  insures  against  accidents. 

Mr.  Martin:     That  is  in  the  nature  of  State  insurance  is  it,  sir? 

The  Commissioner:     State  insurance  at  the  cost  of  the  employer. 

In  the  building  trade  here,  have  there  been  many  accidents  in  the  last  year 
or  two? 

Mr-  Jones:  There  have  been  a  few,  but  we  have  not  been  any  of  the  un- 
fortunate ones. 

The  Commissioner  :  There  have  been  some.  Are  they  due  generally  to 
scaffold  troubles?     Injuries  arising  from  scaffolds  falling? 

Mr.  Jones  :     Yes,  principally  so. 

Mr.  Nutejns  :     That  is  inside  scaffolds,  sir. 

Mr.  Jones:     Of  both. 

Mr.  Nutkins:     The  percentage  is  smaller. 

The  Commissioner:  Have  the  builders  here  pretty  well  observed  the  law 
of  last  season  about  scaffolds? 

Mr.  Nutkins:     We  have  had  a  stringent  by-law  in  the  last  few  years. 

The  Commissioner:  An  act  was  passed  last  session  which  is  supplementary 
to  the  municipal  regulation,  although  the  municipal  regulation  may  go  further 
than  the  act. 

Mr.  Nutkins  :  The  way  I  take  it  to-day,  sir,  is  that  the  employee  looks  to  be 
insured;  that  you  pay  your  insurance  pro  rata,  the  bricklayer  pays  so  much 
and  the  plasterer  so  much,  each  trade  is  different  in  the  amount  to  be  paid. 

The  Commissioner:  Do  the  builders  generally  insure  against  accidents? 

Mr.  Nutkins:  As  a  general  rule,  sir. 

The  Commissioner:  The  men  that  have  shops? 

Mr.  Nutkins  :  I  could  not  say  about  the  shops.  I  am  not  interested  in  the 
shops. 

The  Commissioner  :  I  mean  builders  who  have  shops.  I  suppose  all  of 
them  have  more  or  less  shops,  some  with  considerable  machinery  in  them,  turning 
out  stuff  for  their  buildings.     Do  you  think  they  generally  insure? 

Mr.  Jones  :  I  think  so. 

Mr.  Nutkins  :  Yes,  sir. 

The  Commissioner:     What  do  you  pay  as  a  premium? 

Mr.  Jones  :  It  is  different. 

The  Commissioner:  For  outside  work  you  pay  more  than  for  inside? 

Mr.  Jones:  They  charge  more  for  a  plasterer  than  for  a  bricklayer. 


262  MINUTES  OF  EVIDENCE:  No.  65 

Mr.  Nutkins:  One  per  cent,  for  a  plasterer,  and  it  runs  from  1.32  to  1.36 
for  a  bricklayer. 

The  Commissioner:  How  much  for  a  carpenter? 

Mr.  Nutkins:  That  is  graded. 

The  Commissioner:  Outside  and  inside? 

Mr.  Nutkins:  Yes,  the  millmen  are  graded  from  the  outside.  There  are 
carpenters  here. 

Mr.  Martin  :  I  think  it  is  forty  cents  for  a  millman. 

The  Commissioner:  They  pay  more  than  that  in  Toronto.  I  have  a  state- 
ment from  Mr.  Dillon  there.  I  think  they  pay  40  cents  for  inside  men  and  for 
the  outside  men  nearly  four  or  five  times  that,  that  is,  men  working  on  scaffolds 
and  that  kind  of  thing. 

Do  you  think  a  law  which  made  the  employer  liable,  regardless  of  his  negli- 
gence or  want  of  proper  appliances,  a  reasonable  law? 

Mr.  Nutkins:  The  way  I  look  at  it  is  this:  you  insure  the  man,  and  sup- 
posing the  man  meets  with  an  accident  on  a  building,  if  you  are  human  you 
would  send  him  to  the  hospital  and  get  a  doctor.  You  pay  his  insurance,  and 
when  it  comes  to  you  you  fill  out  a  form.  Then  they  turn  round  and  say,  if  he 
sues  you  we  will  defend  it.  You  don't  get  anything  for  the  man  that  is  hurt.  You 
pay  the  doctor's  bills  and  the  hospital's  fees  and  at  the  same  time  you  are  paying 
insurance  rates. 

The  Commissioner  :  Yes,  I  suppose  that  is  often  so.  They  won't  pay  any- 
thing until  they  are  made  to. 

Mr.  Nutkins:  I  don't  think  that  is  square.  The  employee  expects  to  be  in- 
sured to-day. 

The  Commissioner:  Then  your  difficulty  about  insurance  is  that  they  do 
not  pay  promptly  and  it  does  not  get  to  the  right  quarter  quickly  enough? 

Mr.  Nutkins  :  If  an  employer  insures  a  man,  I  claim  he  should  get  what 
he  pays  for. 

The  Commissioner  :  Surely  they  do  not  all  insist  upon  a  suit  being  brought  ? 

Mr.  Nutkins  :  As  a  general  rule  the  settlement  don't  come  about  unless  they 
force  it.  I  myself  am  in  favour  of  Provincial  or  Government  insurance.  Then 
there  is  this  point,  a  big  corporation  takes  so  much  per  cent,  off  the  man's  wages; 
a  small  firm  can't  do  that. 

The  Commissioner:  Their  proposition  is  not  to  take  anything  out  of  the 
men's  wages.     It  all  comes  out  of  the  emploj^er. 

Mr.  Nutkins:  Still,  that  is  where  the  corporation  has  it  on  the  small  firm. 

Mr.  Stratfold:  I  think  the  law  as  it  stands  is  not  unreasonable.  I  pay  so 
much  money  myself  for  wages  during  the  year.  I  think  it  is  50  cents  or  what- 
ever it  is  for  $3,000.  I  couldn't  say  exactly  what  it  is.  I  saw  a  case  here  a 
short  time  ago  where  a  man  pinched  his  finger.  He  should  never  have  got  any- 
thing for  it,  but  he  wanted  something.  I  think  the  way  it  stands  now  is  that  a  per- 
son furnishing  proper  appliances  has  no  trouble  at  all. 

The  Commissioner:  They  say  that  35  per  cent,  of  the  accidents  at  least  are 
non-preventable;  that  those  aro  incident  to  the  rapidity  with  which  work  is  done 
nowadays.  That  is  taking  all  the  industries  together.  A  man  has  to  work  under 
a  good  deal  of  stress  in  these  factories.  Then  the  difficulty  about  the  present 
system  is  that  there  is  always  a  contest  as  to  whether  the  workman  contributed  to 
the  accident.     Nearly  all  the  litigation  is  about  that.     They  propose  to  eliminate 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  263 

that  difficulty,  and  say  although  the  workman  has  been  careless  he  should  never- 
theless be  compensated  for  the  injuries.     That  is  their  proposition. 

Have  you  met  the  same  difficulty  about  insurance  companies  not  being 
prompt  in  settlement  of  losses? 

Mr.  Stratfold:  Well,  I  have  never  had  any  accidents  owing  to  myself. 

Me.  Charles  Gould:  Then,  sir,  no  matter  how  careful  we  are  with  our 
sea  Holding,  we  may  pick  the  scaffolding  over  very  carefully  and  send  it  to  the 
building  and  some  other  trade  may  use  our  scaffolding  and  possibly  throw  it 
down  instead  of  lowering  it,  and  crack  a  plank  and  our  men  use  that  plank  and 
walk  on  it,  and  we  are  responsible. 

The  Commissioner:  Under  the  law  as  proposed  you  would  be.  Of  course 
what  is  said  is  that  to  insure  against  these  losses  is  not  a  very  heavy  tax  upon 
the  industry;  but  it  is  a  very  serious  thing  if  a  man  is  injured,  to  him  and  his 
family. 

Mr.  Martin  :  The  great  trouble  with  the  present  law  is  that  while  we  are 
paying  for  protection,  and  we  are  entitled  to  get  it,  we  also  want  our  employees  to 
be  protected.  That  is,  that  if  a  man  is  entitled  to  anything  if  he  has  met  with 
an  accident,  there  is  no  way  for  him  to  get  anything  unless  he  sues  the  com- 
pany, and,  as  Mr.  Nutkins  says,  in  the  case  of  an  accident  we  must  use  first  aid 
and  help  the  man  out  and  to  a  certain  extent  that  has  been  construed  as  an  ac- 
cessory. 

The  Commissioner:  An  admission  of  liability? 

Mr.  Martin  :  Yes.  I  don't  think  that  that  is  the  proper  thing,  but  that  is 
one  of  the  biggest  difficulties  to  my  mind. 

The  Commissioner:  Is  your  experience  the  same  as  Mr.  Nutkins,  that 
nearly  always  these  claims  are  resisted? 

Mr.  Martin:  I  think  that  in  over  50  per  cent,  of  them  they  are. 

The  Commissioner:  The  difficulty  about  the  State  insuring  at  the  expense 
of  the  employers  would  be  the  machinery  for  collecting  the  premiums.  I  do  not 
know  whether  it  would  be  possible  to  devise  a  scheme  that  would  not  involve  an 
army  of  tax  collectors.  As  they  propose  it,  it  applies  to  the  man  who  has  one 
employee.  It  is  not  confined  to  the  large  factory.  Applying  it  to  this  city,  to  go 
around  and  collect  from  everybody  employing  from  one  man  up  would  be  a 
pretty  serious  business. 

Mr.  Martin  :     Still  the  insurance  companies  employ  the  same  means. 

The  Commissioner:  But  you  go  to  the  insurance  companies. 

Mr.  Martin:  No,  sir;  they  send  a  man  around  and  inspect  the  pay-roll  every 
year. 

The  Commissioner:  I  do  not  suppose  they  bother  themselves  with  a  little 
one. 

Mr.  Gould:  That  is  where  the  trouble  is  to-day,  I  think,  where  the  work- 
man is  really  not  insured  in  the  majority  of  cases.  The  smaller  employer  does 
not  insure  and  in  very  many  instances  he  is  not  worth  suing  and  the  employee 
has  no  chance  of  getting  anything,  so  that  really  the  law  is  of  practically  very 
little  use  to  the  employee,  as  well  as  a  burden  to  the  employer. 

The  Commissioner:  The  British  law  would  not  help  at  all  because  it 
leaves  you  individually  liable.  The  law  by  which  the  State  insured  would  be  a 
different  thing. 

Mr.  Gould:  The  only  way  to  help  that  would  be  to  compel  every  employer 
to  insure  his  men,  make  it  compulsory. 


264  MINUTES  OF  EVIDENCE:  No.  65 

The  Commissioner:  What  would  you  do  with  a  man  that  is  not  worth  any- 
thing, that  you  could  not  collect  the  premium  from? 

Mr.  Gould:  He  should  not  he  in  business. 

The  Commissioner:  You  would  have  to  put  him  out  of  business. 

Mr.  George  Gould:  Could  not  the  onus  of  collecting  be  put  on  the  opera- 
tive? 

The  Commissioner:  I  do  not  know.  I  would  not  want  to  be  an  operative 
and  have  to  go  and  collect  the  premium  from  my  employer. 

Mr.  G.  Gould:  Make  it  compulsory  that  a  certain  percentage  of  his  wages 
should  apply  to  insurance. 

The  Commissioner:  They  do  not  want  that.  They  do  not  want  to  con- 
tribute a  cent. 

Mr.  Gould:  They  want  to  be  insured  but  do  not  want  to  pay  for  it. 

The  Commissioner:  They  do  not  want  to  pay  for  anything;  they  want  the 
whole  burden  to  be  on  the  industry. 

Mr.  G.  Gould:  Could  not  the  employer  pay  it  and  add  it  to  their  envelope? 

The  Commissioner  :  Don't  you  think  there  would  be  a  little  friction  if  they 
did  not  find  their  money  in  the  envelope. 

Mr.  Gould:  If  they  did  not  find  their  wages  there,  what  could  they  do? 

The  Commissioner:  Wages  are  a  different  thing.  Do  you  think  it  would 
be  practical  through  the  municipal  organization,  through  the  tax  collector,  to 
put  the  burden  upon  the  municipality  of  collecting  the  taxes?  Do  you  think  that 
could  be  worked? 

Mr.  G.  Gould:  How  does  the  Washington  Act  work? 

The  Commissioner:  It  is  experimental.  It  has  only  been  in  force  since 
October  and  they  have  a  Board  appointed.  Apparently  that  Board  collects 
throughout  the  State,  but  it  is  not  known  how  that  will  work.  There  they  had  a 
Commission  composed  of  employers  and  employees,  and  this  is  a  measure  that  they 
unanimously  agreed  upon.  There  is  a  schedule  of  the  rates.  It  does  not  cover 
all  trades. 

Mr.  Martin:  That  is  really  insurance,  of  course? 

The  Commissioner:  That  is  State  insurance.  The  man  looks  to  the  State 
for  his  money. 

Mr.  Martin  :     To  my  mind  that  is  the  proper  thing.     It  is  insurance  we  want. 

The  Commissioner  :  The  trades  run  all  the  way  up  from  powder  works. 

Mr.  G.  Gould:  Another  thing  the  builders  object  to,  sir,  is  that  the  expense 
of  litigation  is  too  much,  and  that  actions  arising  from  accidents  should  be  tried 
by  a  judge  without  a  jury. 

Mr.  Martin  :  That  leads  up  to  another  question,  that  many  actions  are  taken 
by  irresponsible  people  against  contractors,  and  the  contractors  are  generally 
soaked  for  the  law  costs. 

The  Commissioner:  What  has  been  the  experience  of  the  gentlemen  here? 
How  many  times  is  the  most  that  anybody  has  been  sued  or  had  a  claim  made? 
Is  there  anybody  here  who  has  had  half  a  dozen  claims  made? 

Mi;.  Martin:     I  have  had  two  or  three.     Two  went  to  court. 

The  Commissioner:     With  what  result? 

Mr.  Martin:  In  both  cases  the  plaintiff  lost.  In  one  case  it  cost  this  poor 
fellow  about  $175   to  pay  the  costs  of  it. 

The  Commissioner:     The  costs  of  the  employer? 


1912  WORKMEN'S  COMPENSATION  COMMISSION'.  265 

Mr.  Martin:  Yes.  In  the  other  case  the  insurance  company  defended  the 
suit. 

The  Commissioner:  Under  this  law  a  great  many  of  these  difficulties  would 
be  avoided.  Because  at  present  it  is  only  in  a  limited  number  of  cases  that  the 
employer  is  liable.  They  would  make  him  liable  in  almost  every  case,  under  the 
British  law,  so  that  practically  it  would  mean  if  an  accident  happened  that  there 
is  a  claim. 

Mr.  Martin:  There  has  been  considerable  in  the  paper  with  regard  to  this 
British  law  and  I  suppose  lots  of  it  has  been  caricature,  and  one  thing  and  another, 
in  regard  to  servants  and  everyone  else.     Are  they  all  affected? 

The  Commissioner:  It  applies  to  domestic  servants  and  agricultural 
labourers.  Our  present  law  does  not,  nor  did  the  law  as  the  Bill  was  introduced 
into  the  House  by  Mr.  Gladstone — that  is  the  younger  Gladstone — it  had  the  same 
exception,  but  the  House  apparently  struck  that  out  and  made  it  general. 

Mr.  Martin  :  That  is  only  an  experiment,  practically  speaking,  over  there  I 
presume  ? 

The  Commissioner:  Since  1906.  It  is  founded  on  the  old  law,  extending 
the  liability  of  the  employer. 

A  great  many  of  the  States  have  employers'  liability  and  compulsory  insurance, 
compelling  every  employer  to  insure,  either  in  some  cases  with  the  State  insurance 
organization  or  with  a  private  corporation  if  he  so  elects. 

Mr.  Martin:     What  kind  of  insurance  is  that?     Accident  insurance? 

The  Commissioner  :  Accident  insurance.  Of  course  the  rates  would  go  up 
a  good  deal  if  the  liability  was  extended.  The  representative  of  the  Ocean  Accident 
and  Guarantee  Company,  one  of  the  largest  English  companies,  was  examined  and 
he  said  the  result  has  been  in  the  Provinces  in  winch  they  have  increased  the  lia- 
bility of  the  employer  that  the  rates  have  gone  up  very  considerably. 

What  do  you  think  of  the  theory  that  it  is  not  the  employer  that  pays,  it  is  the 
consumer  that  ultimately  pays  all  these  things?  I  suppose  if  you  have  to  pay 
$50.00  or  $100.00  a  year  for  insurance  you  have  to  get  so  much  more  money  out 
of  the  people,  have  you  not? 

Mr.  Martin  :  That  would  not  be  so  bad  if  that  is  all  we  have  to  pay,  but  when 
we  have  to  pay  out  a  couple  of  thousand  dollars  besides  that,  it  comes  pretty  heavy. 

The  Commissioner  :  If  you  had  proper  insurance  why  would  you  have  to 
pay  that  ? 

Mr.  Martin:     There  is  no  reason  why  we  should  if  we  had  proper  insurance. 

The  Commissioner:  I  understand  that  these  companies  do  not  on  the 
ordinary  rates  insure  more  than  $1,500  upon  a  single  life,  a  single  case  and  they  will 
not  insure  more  than — if  I  have  not  forgotten  the  number — ten  in  the  one  accident. 

Mr.  Martin  :     Yes,  sir,  $10,000. 

The  Commissioner  :     And  is  $1,500  the  limit  in  each  case  ? 

Mr.  Martin  :     I  think  it  is. 

The  Commissioner  :  There  are  to  be  some  meetings  in  Toronto  next  week, 
and  the  Manufacturers'  Association,  which  is  a  very  large  and  powerful  organization, 
apparently  has  gone  to  a  good  deal  of  trouble  and  expense  in  getting  people  of 
eminence  to  appear  and  give  evidence  before  the  Commission.  You  will  have  the 
benefit  of  seeing  what  they  say.     I  suppose  it  will  be  reported  in  the  newspapers. 

What  kind  of  feeling  is  there  between  the  labour  organizations  and  the  em- 
ployers in  this  locality?    Is  it  friendly  or  hostile? 

Mr.  G.  Gould:     Friendly. 


266  MINUTES  OF  EVIDENCE:  No.  65 

Mr.  Martin  :  Very  friendly.  That  is  as  far  as  the  building  trade  is  con- 
cerned. 

The  Commissioner  :     That  is  the  way  it  ought  to  be. 

Mr.  Chas.  Gould:  One  trouble  is,  if  there  were  three  accidents  in  the  city 
during  the  year,  those  three  accidents  might  fall  on  one  man.  If  it  was  distributed 
over  the  whole  of  the  building  trade  it  would  not  come  so  heavy,  and  we  would  not 
be  in  so  much  fear.  At  present  we  may  have  a  load  to  carry  and  no  one  else  carry 
anything. 

The  Commissioner:     If  you  were  properly  insured  that  would  not  occur. 

Mr.  Gould:  Even  then  there  is  a  certain  amount  of  incidental  expense  that 
you  cannot  get  away  from. 

The  Commissioner:  One  of  the  things  that  is  said  to  be  a  defect  in  the 
insurance  scheme  is  that  the  man  who  has  the  best  machinery  and  appliances,  and 
takes  the  greatest  care  to  prevent  accidents,  pays  as  much  as  the  man  who  is  careless. 
No  doubt  there  is  something  in  that. 

Mr.  Simpson  :  Seeing  that  the  insurance  man  will  only  pay  a  certain  limit, 
is  the  law  limited  with  regard  to  these  accidents? 

The  Commissioner:  The  amount  is  limited  under  the  act.  It  is  not  limited 
if  there  is  what  is  called  common  law  liability.  The  law  now  is  three  years'  wages 
in  the  same  employment  that  the  man  is  in  at  the  time  of  injury,  of  $1,500,  which- 
ever is  the  larger  sum.     That  is  the  maximum  that  can  be  recovered. 

Are  there  any  gentlemen  here  now  representing  the  artisans,  the  labour 
organizations  ? 

Mr.  James  A.  Bastle:  Yes,  sir,  I  am  President  of  the  Trade  and  Labour 
Council.  I  am  not  well  versed  in  the  Compensation  Act.  I  have  heard  what  these 
gentlemen  have  said.  They  seem  very  fair  in  their  remarks,  towards  the  labour 
men. 

The  Commissioner  :     Do  you  represent  the  District  Labour  Council  ? 

Mr.  Bastle  :     The  city. 

The  Commissioner:  Have  you  ever  thought  of  getting  the  employers  and 
employees  together,  the  representative  bodies  and  discussing  this  matter? 

Mr.  Bastle  :     We  have  not.     It  would  be  a  good  idea  though. 

The  Commissioner  :  What  the  labour  men  in  Toronto  are  saying  is  that  they 
are  very  anxious  to  have  the  law  passed  in  the  coming  session ;  so  that  they  are 
opposed  to  anything  that  might  mean  delay.  I  would  be  very  glad  if  the  two  sides 
would  get  together,  and  if  they  could  agree  upon  something  that  they  thought 
desirable  it  might  be  a  help. 

Mr.  Bastle:  As  soon  as  we  get  well  posted  on  what  this  act  is  to  be. 

The  Commissioner  :  We  do  not  know  what  it  is  to  be  yet.  What  is  asked  by 
the  labour  men  in  Toronto  is  the  British  Act.  That  practically  means  that  if  a 
man  is  injured  in  the  course  of  his  employment,  from  something  caused  by  his 
employment,  regardless  of  his  own  negligence  he  shall  be  compensated,  with  a  limit 
as  to  the  amount.  They  have  not  suggested  the  limit.  Also  they  would  eliminate 
what  is  in  the  British  Act,  that  where  the  accident  arises  from  the  wilful  and 
serious  misconduct  of  the  man  who  is  injured  that  there  should  be  no  recovery  by 
him.  The  British  Act  has  two  exceptions  to  that;  if  he  is  killed  or  seriously  and 
permanently  disabled  his  family  are  entitled  to  be  compensated  although  the  accident 
was  caused  by  him.  It  is  difficult  to  say  how  one  can  justify  compensating  a  man 
in  a  case  like  this:  take  a  railway  engineer  who  deliberately  disregards  a  signal; 
he  sees  it  and  passes  it  with  his  eyes  open,  and  the  result  is  the  train  is  wrecked 
and  hundreds  of  thousands  of  dollars  damage  done,  and  perhaps  lives  lost,  that  he 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  -'tu- 

sh mi  Id  be  entitled  to  say  to  the  railway  company,  "Pay  me  because  I  broke  my 
leg."  That  does  not  seem  very  just,  but  the  answer  they  make  is  that  his  family 
is  not  to  blame. 

Mr.  Bastle:  I  should  think  where  a  man  is  the  cause  of  an  accident  him- 
self he  should  not  be  paid  for  it. 

Mr.  Marks  :  I  think  in  the  case  of  a  railroad  it  is  known  by  railroad  men  that 
when  a  railroad  engineer  dies  in  a  collision,  the  blame  goes  on  him,  where  if  he 
could  be  heard  in  his  own  defence  a  different  story  would  be  told.  My  father  was  a 
railway  engineer  for  years  and  I  have  had  communication  with  railway  men,  and 
my  belief  is  that  if  an  engineer  were  to  live  up  to  the  regulations  he  would  be  told 
to  take  his  walking  papers.  In  fact  railroad  men  believe  that  rules  are  put  in  the 
rule  book  on  purpose  to  catch  them  in  times  of  accident.  I  have  heard  my  father — 
and  I  had  every  confidence  in  him — discuss  these  things  and  say  that  he  had  been 
in  collisions  where  the  only  thing  that  saved  him  from  being  blamed  was  that  he 
happened  to  be  alive;  if  he  had  been  killed  he  would  have  been  brought  into  it. 

The  Commissioner:     What  was  his  name? 

Mr.  Marks:     George  Marks. 

The  Commissioner:     He  got  his  leg  broken  two  or  three  times  did  he  not? 

Mr.  Marks:     Yes. 

The  Commissioner:  You  hardly  mean  that  the  railway  companies  deliber- 
ately put  these  things  in  to  catch  the  men  ?     They  do  not  do  that  ? 

Mr.  Marks  :  I  believe  they  do,  some  of  them.  I  believe  that  officials  of  the 
railroads,  to  save  the  company,  they  go  as  far  as  they  can.  If  a  man  is  killed  and 
there  is  any  way  of  getting  out  of  the  responsibility  by  blaming  him,  they  are  going 
to  get  out  of  it.  Not  only  that  but  dozens  of  railway  men  have  told  me  they  have 
had  to  appear  as  witnesses  in  cases  where  suits  are  brought,  and  those  men  them- 
selves would  tell  you  they  dare  not  say  what  they  would  like  to  say  or  really  should 
say. 

The  Commissioner  :  If  such  a  man  belonged  to  the  order  of  trainmen,  ought 
he  not  to  be  expelled  if  he  were  not  man  enough  to  tell  the  truth  ? 

Mr.  Marks:     That  is  a  pretty  hard  thing  to  say. 

The  Commissioner:  I  think  the  Order  of  Trainmen  is  strong  enough  to  back 
its  men  up. 

Mr.  Marks  :  The  trouble  is  this,  your  Lordship,  that  while  a  man  cannot  be 
discharged  for  giving  testimony  or  anything  of  that  kind,  still  a  man  who  testifies 
against  a  railway  corporation  will  not  be  discharged  for  that  specific  thing,  but  the 
company  will  soon  have  an  excuse  a  little  later  on  for  something  or  other  and  he 
will  pay  for  it.  Whether  it  is  true  or  whether  it  is  false  that  idea  is  in  the  minds  of 
the  men. 

The  Commissioner:     I  have  no  doubt  that  is  so. 

Mr.  Marks  :  And  that  influences  them  when  they  come  into  a  court  of  law 
to  give  their  evidence. 

The  Commissioner  :  In  the  British  Act  the  only  exception  is  serious  and 
wilful  misconduct.     That  means  a  good  deal. 

Mr.  Marks:  I  am  satisfied  that  in  the  city  of  London  here,  they  are  prac- 
tically of  the  same  opinion  as  in  the  city  of  Toronto ;  they  believe  that  the  British 
law  is  about  the  best  law  that  has  been  enacted  so  far.  Personally  I  believe  that  a 
business  should  carry  the  risks.  Now  I  believe  that  as  a  rule  the  employers  and 
employees  want  to  act  fair  and  they  want  to  get  down  to  some  fair  basis  where 
injuries  occur  and  that  the  compensation  should  not  come  too  heavy  on  the 
employers  or  employees.     Now  there  is  no  doubt  you  are  pretty  well  versed  in  these 


268  MINUTES  OF  EVIDENCE:  No.  65 

matters  and  know  that  a  large  number  of  the  countries  of  Europe,  that  is  Norway, 
Sweden,  Great  Britain,  Germany,  Holland,  Belgium,  Italy  and  those  places,  there 
are  51,900,000  men  come  under  these  Compensation  Acts  and  in  the  majority  of 
those  places  the  law  is  something  like  Great  Britain,  that  is  in  regard  to  insurance, 
voluntary  to  a  great  extent,  but  in  one  or  two  of  these  places  it  is  compulsory  on 
the  part  of  the  State  that  the  employers  must  insure.  Now  if  we  take  into  account 
the  large  amount  of  money  expended  in  litigation,  a  good  deal  of  that  money  could 
go  towards  paying  the  injuries  of  the  men  without  litigation.  Mr.  Eoberts,  an 
English  member  of  Parliament,  in  this  neighborhood  a  short  time  ago,  said  that 
when  the  English  law  first  came  into  vogue  there  was  a  great  deal  of  litigation,  a 
large  amount  eaten  up  in  that  way,  but  after  the  amendments  were  made  the  way 
the  law  is  at  present,  he  said  there  was  practically  no  litigation  in  Great  Britain 
at  all.     That  is  all  saved. 

The  Commissioner:  That  is  a  little  optimistic.  There  is  a  good  deal  of 
litigation  yet  but  not  nearly  as  much  as  there  was  under  the  old  system. 

They  might  get  in  this  country  a  system  such  as  the  British  Act  seems  to 
contemplate  as  existing  there;  that  in,  say  the  building  trade,  the  carpenters  or 
bricklayers  or  whatever  it  is,  that  they  have  a  joint  committee  to  which  is  submitted 
any  claim  of  this  kind.  Why  would  not  that  be  feasible  here  instead  of  having 
all  this  trouble?  I  do  not  overlook  the  fact  that  you  have  the  insurance  company 
to  reckon  with,  but  the  first  thing  there  is  this  kind  of  conciliation  committee  of  the 
employer  and  employed  in  the  particular  trade.  Then  if  that  fails,  arbitration; 
then  finally  the  decision  by  a  County  Court  judge  without  a  jury. 

Mr.  Marks  :  I  believe  in  a  great  many  cases  if  the  employers  and  employees 
got  together  more  frequently  than  what  they  do  and  discussed  these  questions,  they 
could  come  to  a  better  understanding  than  the  present  way,  where  they  keep  so  far 
apart  as  a  rule. 

The  Commissioner:  One  trouble  in  this  country  is  that  there  are  some 
men — and  I  think  they  are  the  worst  for  the  country  and  its  artisans — who  have 
the  idea  that  the  proper  condition  of  things  between  employer  and  employed  is  war, 
that  it  must  be  eternal  war.     That  is  a  very  bad  starting  point. 

Mr.  Marks  :     It  certainly  is. 

The  Commissioner:  I  had  one  man — I  will  not  say  where  it  was — who 
thought  that  was  a  fine  thing;  he  only  wanted  the  law  as  the  thin  end  of  the 
wedge.  He  was  a  socialist,  he  said,  and  he  thought  wars  generally  were  not  bad, 
they  generally  did  a  good  deal  of  good,  a  kind  of  clearing-house.  However, 
fortunately,  that  is  not  what  I  find  to  be  the  general  opinion.  I  think  I  ought  to 
say  to  you  that  here  you  seem  to  be  in  a  much  more — I  do  not  mean  rational — but 
a  more  satisfactory  state  of  mind  at  all  events,  the  employers  and  employed,  than  I 
have  found  anywhere  else. 

Mr.  Marks:  I  think  I  may  say,  your  Lordship,  that  there  are  a  great  many 
employers  of  the  city  of  London  that  the  artisans  think  a  great  deal  of.  We  have 
found  a  great  many  of  them  that  are  very  fair  and  liberal-minded  men,  men  very 
easy  to  get  along  with  and  willing  to  listen  at  all  times.  I  believe,  take  it  as  a 
rule,  that  relations  are  on  a  friendly  basis  in  the  city  of  London. 

The  Commissioner:     That  is  a  good  thing. 

What  do  you  think  of  an  effort  being  made  to  get  the  employers  and  employed 
together  and  discuss  the  lines  upon  which  a  measure  should  be  framed?  Not 
getting  down  to  the  minor  details  but  the  broad,  general  lines. 

Mr.  Marks:     Personallv  I  do  not  think  that  is  a  bad  idea  at  all. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  269 

The  Commissioner:  You  have  a  paper  that  addresses  the  community,  have 
you  not? 

Mr.  Marks:     Yes. 

The  Commissioner:  If  that  sounds  reasonable,  I  wish  that  someone  would 
try  to  start  it. 

Mr.  Bastle  :  I  will  take  that  under  consideration  and  in  the  near  future 
call  the  employers  and  employees  together  at  a  special  meeting.  I  tnink  that  would 
be  a  good  thing  for  their  benefit  and  ours. 

Mr.  Gould:     Have  it  include  all  employers,  manufacturers  and  so  on. 

Mr.  Bastle  :  Issue  a  general  invitation.  The  Trades  and  Labour  Council 
represents  all  trades,  and  the  different  employers  could  express  their  opinions  and 
get  our  opinions,  and  come  to  some  general  idea  or  some  good  feeling  among 
ourselves. 

The  Commissioner:  There  is  some  talk  of  starting  a  mutual  insurance 
company  of  all  the  manufacturers.  I  do  not  know  whether  that  is  going  on  or  not, 
but  that  was  mentioned  at  one  of  the  meetings.  Of  course  if  they  had  a  mutual 
insurance  company  they  would  get  rid  of  a  good  many  of  the  difficulties  that  have 
been  spoken  of  here. 

Mr.  Gould  :  Has  any  action  been  taken  by  the  provincial  authorities  ? 

The  Commissioner:  No,  it  was  the  manufacturers  uniting  and  forming  a 
mutual  insurance  company  to  insure  themselves. 

Mr.  Gould:  Has  there  been  any  conference  between  the  employers  and 
employed  provincially. 

The  Commissioner  :  There  is  not  time  for  that.  The  next  best  thing  would 
be  to  do  it  locally.  You  could  do  it  more  quickly.  I  do  not  know  whether  it  will 
be  possible  to  have  a  bill  ready  for  the  House,  which  will  meet  sometime  next  month, 
but  I  am  anxious  to  do  it  if  I  can. 

Mr.  C  Gould  :  Would  it  be  possible  to  get  all  the  employers  together  ?  Would 
not  the  building  trade  need  to  follow  a  different  line  from  the  manufacturers? 
Could  they  work  together?     Would  their  interests  clash? 

The  Commissioner  :  I  do  not  know  how  that  is.  There  is  a  manufacturers' 
association  in  Toronto.     Is  there  here? 

Mr.  C.  Gould:     Mr.  Gartshore  is  here,  he  can  tell  you. 

Mr.  Gartshore  :     There  is  no  association  here,  sir. 

The  Commissioner:  Do  the  building  trades  belong  to  the  Canadian 
association  ? 

Mr.  Gartshore:     I  think  not,  sir. 

Mr.  Martin  :  We  have  a  national  association  of  our  own,  sir.  A  national 
builders  association. 

The  Commissioner:  But  your  interests  are  common  are  they  not?  All 
employers  and  employed,  their  interests  must  be  about  the  same? 

Mr.  Martin:     I  would  think  they  run  very  nearly  alike. 

The  Commissioner:  Well,  Mr.  Gartshore,  can  you  give  me  any  light  upon 
this  difficult  subject? 

Mr.  Gartshore  :  I  have  had  a  good  deal  of  experience,  I  am  sorry  to  say,  in 
accidents.     I  have  some  ideas  on  the  subject  too. 

The  Commissioner  :     I  shall  be  glad  to  hear  them. 

Mr.  Gartshore  :  I  think  the  conditions  as  they  are  now  are  not  satisfactory 
to  either  the  employer  or  the  workman.  If  a  man  is  injured  he  goes  home  and 
remains  there  until  he  gets  well,  which  rfiay  extend  over  a  period  of  weeks  or  months. 
During  that  time  the  manufacturer  cannot  approach  him  without  prejudicing  his 


270  MINUTES  OF  EVIDENCE:  No.  65 

own  case.     The  consequence  is  he  is  out  of  work  and  out  of  money,  and  his  family 
is  suffering. 

It  seems  to  me  that  if  any  act  is  passed  it  should  provide  that  the  man  should 
have  instant  revenue  of  some  kind  coming  in. 

If  the  employer  approaches  the  man  with  a  view  of  settlement,  it  may  prejudice 
his  case.  At  the  same  time,  as  a  rule  the  insurance  companies  do  not  authorize 
you  to  take  action.  I  could  cite  cases  where  men  would  have  been  glad  to  settle 
in  a  short  time  and  it  would  have  been  much  to  their  advantage,  but  the  matter 
dragged  on  for  months,  the  case  came  into  court  and  was  tried,  and  then  carried 
to  another  court,  and  meantime  the  family  was  suffering. 

I  have  taken  a  few  notes  of  suggestions  that  I  have.  I  do  not  know  whether 
they  will  meet  with  approval  or  not. 

I  agree  that  the  men  should  be  compensated.  Also  that  they  should  pay  no 
fee  towards  their  insurance. 

As  it  is  now  the  only  recourse  we  have  is  to  insure  and  leave  the  onus  on  the 
insurance  company.  I  think  that  immediately  a  man  is  injured  he  should  receive 
part  pay,  part  of  his  wages.  I  would  not  like  to  say  how  much,  because  nearly  all 
men  are  insured  in  some  society  or  benefit  organization.  To  give  a  man  all  his 
pay  would  put  a  premium  on  dishonesty,  because  he  might  be  receiving  more  when 
he  was  sick  than  when  he  was  well.  He  might  receive  say  half  his  pay  from  the 
time  of  his  injury  and  it  should  be  paid  weekly  to  him,  and  not  to  exceed  a  period 
of  say  three  months.     Medical  attendance  and  medicines  meantime  free. 

He  should  be  examined  by  a  doctor  from  time  to  time  in  the  interests  of  the 
company,  and  should  be  required  to  return  to  work  immediately  the  doctor  reports 
him  fit. 

Fixed  compensation  should  be  determined  on  his  report  to  duty;  based  on  per- 
manent injury  if  any,  and  the  effects  if  any  on  his  earning  capacity,  and  any  effect 
on  his  constitution  if  the  direct  result  of  the  injury. 

Compensation  should  not  be  in  a  bulk  sum,  but  in  regular  payments  properly 
secured.  My  experience  has  been  in  many  cases  that  where  a  man  received  a  bulk 
sum  it  was  frittered  away  and  was  of  very  little  use  to  him,  and  he  was  shortly  in 
as  bad  shape  as  ever,  and  not  able  to  work. 

The  compensation  should  be  such  as  will  preserve  the  harmonious  relations 
between  employer  and  employed.  Such  relief  systems  as  are  at  present  in  force 
should  be  preserved  and  the  creation  of  a  further  voluntary  system  should  be 
encouraged. 

You  are  aware,  Sir  William,  that  some  companies  have  already  an  arrange- 
ment whereby  they  effect  a  settlement  with  their  own  men  and  do  not  insure.  I 
have  had  ideas  in  that  line  but  have  deferred  taking  any  action  because  of  the 
legislation  that  is  suggested. 

The  Commissioner:  Let  me  interrupt  you  there.  The  British  Act  provides 
thai  where  there  is  an  arrangement  between  an  employer  and  his  employees,  which  is 
approved  by  the  registrar  of  friendly  societies  as  a  reasonable  one,  that  that  takes 
the  place  of  the  compensation  provided  by  the  act. 

Mr.  Gartstiore:  I  think  that  would  be  very  proper.  I  can  cite  a  case  in 
which  a  man  was  injured  comparatively  slightly,  but  an  artery  was  cut.  If  he  had 
not  received  first  aid  and  intelligent  attendance  he  might  have  died  from  loss  of 
blood.  Receiving  that  promptly  and  being  bandaged  properly,  he  was  able  to  go 
back  to  work  immediately.  I  think  where  companies  make  these  provisions  and 
where  the  employees  are  willing  that  settlement  should  be  affected,  as  you  say 
subject  to  the  approval  of  the  department,  that  it  would  be  wise  to  provide  for  that 
in  ilio  act. 


1912  WORKMEN'S  COMPENSATION"  COMMISSION.  271 

The  Commissioner:  Who  is  the  representative  of  the  St.  John  Ambulance 
Corps  ? 

Mr.  )Gartshore:    We  have  a  branch  in  the  city. 

The  Commissioner:     Is  he  a  member  in  your  employment? 

Mr.  Gartshore:  We  have  several  of  them.  We  encourage  every  man  to 
take  that  course. 

The  Commissioner:  An  unfortunate  man  was  killed  the  other  day,  and  a 
charge  of  murder  has  arisen  out  of  it.  An  artery  was  severed  and  no  one  was  able 
to  attend  to  him  and  he  died.  His  injury  might  not  have  been  very  serious  if 
promptly  attended. 

Mr.  Gartshore  :  A  qualified  person  can  stop  the  flow  of  blood  until  a  doctor 
arrives. 

The  Commissioner  :  The  great  difficulty  of  the  present  system,  everyone 
seems  to  agree,  is  the  large  amount  that  is  wasted  between  the  insurance  company 
and  the  man  that  is  hurt.  So  much  of  it  is  spent  one  way  or  another.  First  the 
expense  of  getting  the  insurance,  which  is  very  considerable.  Then  the  amount 
expended  in  litigation. 

Mr.  Gartshore:  If  we  paid  the  amount  into  a  fund  that  we  pay  the  insur- 
ance companies,  we  could  compensate  every  man  who  is  injured,  and  he  would 
receive  double  the  amount  he  does  now,  on  an  average.  And  the  expense  of 
insurance  and  legal  proceedings  would  be  avoided.  It  is  plain  that  I  am  not  here 
in  the  interests  of  the  legal  profession. 

The  Commissioner:  They  will  always  take  care  of  themselves.  Would  it 
be  practicable  in  a  large  establishment  like  yours  for  a  committee  of  the  employees 
and  a  representative  on  your  side  to  adjust  disputes  as  well  as  compensation? 

Mr.  Gartshore  :  I  think  there  may  be  disputes  that  could  not  be  settled  and 
that  there  might  be  some  court  to  which  these  could  be  referred  as  a  last  resort. 
But  nine-tenths  of  the  actions  could  be  settled  in  that  way  to  the  satisfaction  of  all 
concerned. 

The  Commissioner:  Then  you  do  not  see  any  objection,  as  I  understand 
you,  Mr.  Gartshore,  to  making  the  industry  bear  the  burden  of  the  accidents 
incidental  to  it? 

Mr.  Gartshore  :     No,  none. 

The  Commissioner  :  Is  anyone  with  you  or  representing  the  same  phase  of 
the  question? 

Mr.  Gartshore:  I  have  not  consulted  anybody  on  the  subject,  Sir  William. 
The  Chairman  of  the  Board  of  Trade  is  here. 

Mr.  Eeesor,  (Chairman,  Board  of  Trade)  :  Speaking  for  a  good  many  of  the 
members  of  the  Board  of  Trade,  I  think  the  conference  that  has  been  spoken  of 
would  be  a  splendid  way  to  arrive  at  some  conclusion.  The  trouble  up  to  now 
has  been  that  we  have  not  had  very  much  to  work  on. 

The  Commissioner:  I  will  be  very  glad  to  send  a  copy  of  this  Washington 
Act,  and  copies  of  the  British  Act  will  be  available  for  you  here. 

Mr.  Eeesor:     I  think  we  have  copies  of  the  Washington  Act. 

The  Commissioner  :  The  Washington  Act,  I  think,  will  require  a  little  con- 
sideration. There  is  a  good  deal  of  pressure  to  introduce  that  here  supplementary 
to  Workmen's  Compensation.  State  insurance  will  have  to  be  thought  out  very 
carefully  before  it  is  adopted. 

Mr.  Eeesor  :  A  great  many  of  our  members  feel  that  the  present  method  is 
rather  cumbersome  and  leads  to  antagonism  between  employers  and  employed  when 


272  MINUTES  OP  EVIDENCE:  No.  G5 

there  should  be  no  occasion  for  it.     Because  the  insurance  companies  will  always 
fight  a  case  under  the  present  system. 

The  Commissioner:  May  I  ask  you  Mr.  Marks,  or  you  Mr.  President, 
whether  when  a  man  is  injured  the  labour  organization  to  which  he  belongs  does 
anything  to  help  him  in  his  case?  To  assist  him  in  getting  his  case  presented  and 
getting  it  satisfactorily  settled?     Or  do  they  leave  it  to  himself? 

Mr.  Bastle  :  That  is  a  point  that  I  have  never  heard  discussed  before.  Some 
organizations  have  an  insurance  for  their  own  men. 

The  Commissioner:  Yes,  but  I  mean  this:  a  man  is  injured;  he  belongs  to 
the  carpenters'  union. 

Mr.  Archer  :     I  do  not  think  that  is  done,  sir. 

The  Commissioner  :     Why  should  it  not  be  done  ? 

Mr.  Archer:  I  do  not  know.  The  feeling  seems  to  be  that  it  is  a  case  of 
antagonism  existing  between  the  employer  and  the  union  to  which  this  man  belongs. 
I  do  not  think  it  is  that  at  all ;  I  don't  think  the  union  desires  to  get  something 
out  of  the  employer,  which  he  does  not  think  the  man  who  is  injured  should  receive. 
I  think  it  is  purely  a  question  between  the  person  who  is  hurt  and  the  man  he 
works  for,  to  tide  him  over  or  give  him  assistance  during  the  time  he  is  incapacitated. 
I  think  it  would  be  a  deplorable  state  of  affairs  if  the  union  took  his  case  up, 
because  there  would  be  that  feeling  of  fighting  and  goodness  knows  there  is  enough 
trouble  between  labor  organizations  and  employers  now. 

The  Commissioner:  I  would  have  thought  they  might  advise  him  to  be 
reasonable.     He  might  get  bad  advice  outside  the  organization. 

Mr.  Archer:  It  might  be  but  I  hardly  think  so.  It  would  be  a  continual 
source  of  strife  all  the  time,  that  the  labour  organization  is  getting  this,  and  the 
other  side  might  say  the  man  did  not  want  it  but  it  was  a  chance  for  the  labour 
organization  to  fight  the  employer,  which  they  don't  want  to  do,  and  it  would  keep 
that  thing  going  all  the  time. 

Mr.  Marks  :  I  believe  there  have  been  instances  in  which  organizations  have 
come  forward  and  assisted  the  man  when  they  thought  it  necessary  in  bringing  the 
case  before  the  law.  But  different  organizations  have  different  rules  and  a  man  is 
not  competent  to  speak  for  more  than  the  organization  he  belongs  to  himself.  Of 
course  the  men  in  these  organizations  have  sick  and  disability  benefits,  and  they 
come  under  them. 

The  Commissioner:  Why  could  not  the  bricklayers  union  have  a  committee 
that  would  meet  with  a  committee  of  the  builders  or  master  bricklayers  and  deal  with 
a  case  of  a  claim  for  compensation,  say  whether  it  was  right  and  how  much  should 
be  paid  ? 

Mr.  Marks:  I  cannot  see  anything  to  stop  them.  I  think  that  could  have 
taken  place  years  ago  but  apparently  they  have  never  come  together  on  those  lines 
as  yet. 

Mr.  Martin  :  I  think,  Sir  William,  the  biggest  reason  why  that  is  not  done  is 
because  some  lawyer  gets  after  them  too  quick. 

Mr.  Nutkins:  I  think  it  is  feasible  enough,  but  the  employee  really  expects 
to  be  insured.  I  have  heard  of  cases  where  a  man  has  asked  the  question,  "  Have 
you  got  me  insured?"  as  soon  as  he  met  with  a  little  accident.  Of  course  if  you 
pay  for  a  man's  insurance  he  should  get  what  you  pay  for.  If  you  go  to  a  grocery 
store  and  buy  a  barrel  of  apples  and  they  give  you  a  peck,  I  know  I  would  kick 
about  it.     We  all  would.     If  we  pay  for  insurance  we  should  get  it. 

Mh.  Mabtin:     We  are  getting  mixed  up  on  that  expression.     We  are  not  pay- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  273 

ing  for  insurance.     It  is  protection  we  are  paying  for-     Insurance  is  really  what 
we  ought  to  have,  but  at  present  we  are  just  protected  from  lawsuits. 
The  Commissioner:     You  are  indemnified  against  paying. 
Mr.  Martin:     Personally  I  would  like  to  see  a  mutual  insurance  company 
society.     I  mean  both  as  employers  and  employees. 

The  Commissioner:  A  case  occurs  to  one,  such  as  this.  A  prospector  in  the 
Cobalt  region  goes  out  and  takes  two  men  with  him.  An  accident  happens,  an 
explosion  or  something.  If  the  two  men  are  injured  they  have  a  claim  against  the 
employer  under  the  act.  The  employer  is  injured  in  the  same  accident  a  great 
deal  more  than  they  are  but  has  no  claim  against  anyone,  he  is  the  sufferer  all 
around.     It  is  pretty  hard  to  get  a  system  that  works  evenly. 

Mr.  Martin  :  There  is  another  case  which  happened  recently.  You  may 
have  noticed  a  report  of  it  in  the  paper.  A  contractor  putting  in  stairways  in  a 
new  building.  His  own  men  are  insured  against  accidents  or  against  his  own 
negligence.  One  of  his  men  was  injured  very  seriously  by  a  workman  under 
another  contractor.  The  employer  of  the  injured  man  had  him  conveyed  im- 
mediately to  the  hospital  and  agreed  to  be  responsible  for  the  bills  there,  contrary 
to  the  provisions  of  the  insurance  of  course.  The  only  person  the  man  could 
recover  any  damages  from  was  his  own  employer,  and  his  employer  would  have 
to  be  out  certainly,  the  hospital  fees,  and  he  has  no  insurance;  he  cannot  come  on 
the  insurance  company  because  his  employee  was  not  injured  by  a  fellow  employee 
but  by  someone  else.     There  is  something  there  that  does  not  appear  straight  to  me. 

The  Commissioner:  It  may  be  that  he  is  not  liable  in  that  case.  There 
was  a  case  something  like  that  disposed  of  within  a  year  or  two.  A  bricklayer  and 
a  carpenter.  The  bricklayer  had  put  up  his  gangway  to  go  into  a  building  safely. 
The  carpenter  had  moved  it  for  some  purpose.  The  workman  going  in  in  the 
morning  thought  it  was  all  right,  just  as  it  was  the  night  before-  The  first  thing 
he  knew  he  was  down  in  the  basement  and  pretty  badly  injured.  He  sued  his 
employer  but  failed.  The  employer  had  put  a  proper  gangway  there  and  someone 
else  had  interfered  with  it. 

Mr.  Martin  :  That  was  a  hardship  for  the  man ;  he  had  no  rights. 

The  Commissioner:  It  was  very  hard,  undoubtedly. 

Mr.  C.  Gould  :  At  the  same  time,  I  suppose  it  cost  the  employer  quite  a  bit 
to  find  that  out? 

The  Commissioner:  No  doubt  it  did.  He  had  to  get  up  to  the  second- 
court  before  he  ascertained  that.  However,  there  is  always  the  consolation  that 
we,  the  great  consumers,  pay  all  this.  It  is  not  the  builder  that  pays  in  the 
long  run. 

Mr.  C  Gould:  The  individual  builder  does.    The  trade  as  a  whole  may  not. 

The  Commissioner:  He  has  got  to  make  ends  meet;  make  someone  pay. 

Mr.  C.  Gould:  He  may  go  to  the  wall. 

Mr.  Murray:     And  then  someone  pays. 

Mr.  C.  Gould:     When  will  this  be  presented  to  the  House? 

The  Commissioner:  I  do  not  know.  It  cannot  be  presented  until  I  get 
ready,  but  they  want  it  to  be  ready  very  quickly.  My  own  idea  is,  if  we  could 
persuade  the  workmen  to  wait  a  little  longer,  it  would  be  better  to  wait  and  get 
a  better  measure,  rather  than  to  have  something  half-baked. 

Mr.  Martin:  It  would  be  better  to  have  a  measure  agreeable  to  all  parties 
rather  than  to  have  the  thing  fought  out. 

The  Commissioner:  What  ought  to  be  swept  away  as  quickly  cs  possible  is 
18  l. 


274  MINUTES  OF  EVIDENCE:  No.  65 


the  doctrine  of  common  employment.  That  is  a  relic  of  barbarism.  And  there 
ought  to  be  a  modification  of  the  doctrine  of  contributory  negligence  on  the  part 
of  the  workman.  I  am  very  glad  to  hear  Mr.  Gartshore's  broad  view  of  what 
ought  to  be  done.  What  is  required  is,  not  to  hurt  the  employer  too  much,  and 
to  give  the  employee  as  much  as  possible.  That  is  the  great  desideratum.  Have 
you  considered  such  a  scheme  as  this  Washington  Act,  Mr.  Gartshore  ? 

Mr.  Gartshore:  I  have  read  it  over. 

The  Commissioner  :  How  does  it  strike  you  as  a  first  impression  ?  Would 
it  be  practicable  to  work  a  measure  of  that  kind  here,  the  State  undertaking  to 
collect  the  tax? 

Mr.  Gartshore:  I  think  all  questions  of  this  kind,  whether  concerning 
operatives,  domestics  or  farm  labourers,  no  matter  what  class,  should  be  all  under 
the  same  act  and  the  employer  liable  in  the  same  way.  I  do  not  see  why  a  man 
running  a  threshing  machine  should  not  be  protected  as  well  as  a  man  running 
a  planing  machine. 

The  Commissioner:  Is  there  not  something  to  be  said  on  the  other  side 
there?  The  theory  in  the  first  place  was  that  this  was  to  protect  workmen  in 
hazardous  trades.  There  is  not  much  hazard  in  the  occupation  of  a  domestic 
servant. 

Mr.  Gartshore:  No,  and  there  is  not  much  liability.  There  are  not  many 
accidents.  But  as  far  as  agricultural  labour  is  concerned  it  is  getting  to  be 
largely  mechanical. 

The  Commissioner:  The  farmers  of  this  country  would  raise  an  awful  row 
if  you  attempt  to  tax  them  in  this  proposed  measure. 

Mr.  Gartshore:     No  doubt;  and  the  average  politician  is  catering  for  their 

vote. 

The  Commissioner:  I  have  noticed  a  tendency  on  the  part  of  the  manufac- 
turers' association  to  try  to  make  up  to  the  farmer. 

Mr.  Gartshore:  I  am  told  that  40  per  cent,  of  the  accidents  happen  on 

farms. 

The  Commissioner:  Mr.  Waldron  made  a  statement  about  that.  I  should 
doubt  those  figures.  I  do  not  know  where  he  was  reading  from.  It  is  a  very 
large  number. 

Mr.  Gartshore:  They  have  traction  engines,  and  nearly  all  their  machinery 
is  now  run  by  power. 

The  Commissioner:  What  do  you  think  of  this  case:  A  farmer  employs  a 
man  and  pays  him  good  wages.  The  man  is  in  the  stable  attending  to  a  quiet  horse. 
Something  happens  and  the  horse  throws  out  its  heels,  hits  the  man  and  breaks 
his  leg.  If  you  ask  a  farmer  to  pay  compensation  for  that  he  would  think  you 
were  mad.  It  is  no  fault  of  his.  Perhaps  it  would  ruin  him  if  he  had  to  pay  it. 
That  is  the  way  they  look  at  it. 

Mr.  Gartshore  :  If  the  man  were  working  for  a  builder,  he  would  be  liable. 

The  Commissioner:  But  you  see  the  farmer  cannot  stick  it  on  to  anybody. 
His  market  is  fixed.  With  the  manufacturer  it  is  just  one  of  the  expenses  of  the 
industry. 

Mr.  Reesor:  What  about  the  victim  of  this  farm  accident?  It  is  just  as 
painful  for  him  to  be  kicked  on  a  farm  as  anywhere  else. 

The  Commissioner:  Logically  that  is  so,  but  logic  does  not  always  prevail 
in  this  world.  There  is  a  good  deal  of  opportunism  instead.  We  have  to  pro- 
pose a  measure  that  will  pass.     There  is  no  use  proposing  a  measure  that  will  be 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  275 

sure  to  be  defeated.  I  recollect  when  this  employers'  liability  was  introduced  a 
good  many  years  ago,  the  representatives  of  farming  communities  were  very 
strong  about  keeping  the  farmers  out.  They  would  not  listen  to  it  at  all.  Then 
you  see  in  nine  cases  out  of  ten  they  do  not  need  an  act  of  that  kind  because 
the  farmer  is  generally  the  boss,  superintending  the  operation,  and  if  there  is 
any  negligence  it  is  his  negligence,  and  this  doctrine  of  common  employment  is 
out  of  it  altogether. 

Mr.  Reesor:  Are  the  Provinces  of  Canada  dealing  with  this  measure  in- 
dividually? 

The  Chairman:  Yes. 

Mr.  Reesor  :  Is  there  no  Dominion  measure  ? 

The  Commissioner:  I  do  not  know  whether  it  would  be  competent  for  the 
Dominion  to  pass  a  measure  of  that  kind.  I  had  a  circular  sent  to  me  by  the 
Secretary  for  the  Colonies — the  Colonial  Secretary — expressing  the  wish  of  the 
British  Government  that  if  possible  all  the  British  Dominions  should  be  under 
similar  laws  with  regard  to  questions  of  this  kind.  That  is  a  very  big  proposition. 
They  have  different  laws  in  all  the  Provinces.  The  law  of  Quebec  is  modelled 
somewhat  on  the  French  law.  Manitoba,  I  think,  has  something  like  the  British 
law.  British  Columbia  also.  That  is  one  of  the  difficulties.  The  manufacturers 
say  if  you  have  an  onerous  law  in  one  Province  it  handicaps  to  that  extent  the 
manufacturer  with  his  competitors  in  the  other  Province. 

Mr.  Gartshore:  Provision  should  be  made,  I  think,  so  that  automatically 
a  man  will  receive  some  remuneration  promptly  before  the  case  is  dealt  with; 
otherwise  he  is  in  great  distress.  And  provision  should  be  made  for  settlement 
between  employer  and  employees.     I  think  that  ought  to  be  encouraged. 

The  Commissioner:  You  have  had  a  little  experience.  What  do  you  find 
when  you  have  a  lawsuit;  how  does  it  come  out  generally?  Is  it  some  lawyer 
getting  hold  of  the  man? 

Mr.  Gartshore  :  Practically  as  soon  as  an  accident  happens  the  man  is  fol- 
lowed by  one  or  more  lawyers,  and  his  case  taken,  I  am  informed,  without  any 
liability  to  himself.  I  do  not  know  whether  that  is  the  case  or  not.  I  know  a 
great  many  of  these  parties  have  no  money  to  pay  anybody,  so  that  the  lawyer 
could  not  collect  anything. 

The.  Commissioner:  You  see  that  is  the  humanity  in  the  lawyer  who  takes 
up  the  poor  man's  case. 

Mr.  Gartshore  :  Then,  again,  after  the  costs  are  paid  there  is  very  little 
coming  to  the  injured  man. 

The  Commissioner:  No  doubt.  There  is  a  case  tried  at  this  court  where 
when  they  have  got  through  fighting  over  the  amount,  there  will  be  very  little 
left  for  the  man  if  he  succeeds.  Are  the  working  men  here  very  much  enamoured 
of  having  their  cases  tried  by  a  jury?     In  the  British  law  there  is  no  jury. 

Wr.  Rastle:  In  my  opinion,  if  tried  by  a  jury  the  jury  would  be  in  favour 
of  the  working  man.  That  is,  not  in  favour  of  the  employer.  Whereas,  if  tried 
by  a  judge,  the  judge  will  be  fair  and  just  to  everybody;  he  will  take  the  opinions 
of  both  sides,  and  I  think  his  opinion  will  be  fairer  than  a  jury's  opinion. 

The  Commissioner:  In  England  it  is  tried  before  the  County  Court  judge, 
and  there  is  no  appeal  from  him  except  on  questions  of  law.  When  he  settles 
the  facts  that  is  an  end  as  far  as  the  facts  are  concerned.  What  do  you  think  of 
that,  Mr.  Gartshore? 


276  MINUTES  OF  EVIDENCE:  No.  65 

Mr-  Gartshore:     I  think  that  should  be  satisfactory  to  both  parties. 

The  Commissioner:  I  think  you  are  right,  that  the  sympathies  of  the  jury, 
nine  times  out  of  ten,  are  with  the  workman. 

Mr.  Bastle  :  The  unions  are  always  in  favour  of  having  things  fair  between 
employers  and  employed.  We  would  like  to  see  good  fellowship  between  them 
instead  of  this  continual  strife  that  you  say  the  socialists  look  for.  That  is  one 
thing  the  unions  are  very  much  against. 

The  Commissioner:  Have  you  many  socialists  in  London? 

Mr.  Bastle:  No,  sir,  we  do  not  deal  with  them.  We  think  they  are  bad 
people.     There  are  two  or  three  here,  but  they  are  not  interested  in  unionism. 

The  Commissioner  :  There  are  two  kinds  of  socialists.  There  is  a  very  bad 
kind,  and  another  kind  not  quite  so  bad. 

Mr.  Jones:  We  have  one  very  good  one  right  here,  Mr.  Gould.  He  is  a 
very  good  one. 

The  Commissioner:  Are  you  sure  you  mean  a  socialist,  or  do  you  mean  a 
single  taxer?    That  is  a  very  different  story. 

Mr.  Beesor:  We  had  a  case  last  month  where  a  teamster  was  driving  along 
a  street  that  was  torn  up.  A  box  fell  off  his  load  and  struck  a  third  party  who 
was  on  the  sidewalk.  The  third  party  sued  the  owner  of  the  team,  and  the  jury, 
an  ordinary  jury  of  twelve  men,  brought  in  a  verdict  that  the  owner  of  the  team 
was  not  to  blame  in  any  way,  but  that  the  plaintiff  should  get  $150.  The  judge 
said  that  is  rather  strange,  you  must  say  what  you  mean.  Well,  they  said,  we  give 
him  $150.  The  defendant,  who  knew  some  of  the  jurymen,  said  that  was  hardly 
fair  to  him.  In  their  finding  they  said  it  was  caused  by  the  condition  of  the 
streets,  and  therefore  the  defendant  is  in  no  way  to  blame,  but  we  will  give  the 
man  $150.  So  they  were  sent  back  and  they  gave  the  man  $150  in  another  form. 
Afterwards  the  jury  told  the  defendant,  well  we  gave  him  $150  because  it  is  the 
city's  affair,  and  not  yours  anyhow.  That  leads  up  to  this  question,  that  this 
proposed  law  would  not  cover  a  third  party. 

The  Commissioner:  No,  it  is  only  between  employer  and  employed. 

Mr.  Beesor:  It  would  be  open  for  litigation  on  that  point. 

The  Commissioner:  Yes.  The  only  ground  on  which  that  man  could  have 
been  made  liable  was  that  the  driver  was  negligent. 

Mr.  Beesor:  It  was  proved  that  he  was  not.  And  of  course  the  driver  was 
not  worth  it  if  he  had  been  sued. 

The  Commissioner:  Well,  gentlemen,  is  there  any  more  light  I  can  get 
from  you?  I  am  here  to  stay  as  long  as  I  can  be  of  use.  I  am  very  much 
obliged  to  you,  and  I  am  very  glad  to  see  the  spirit  that  prevails  and  I  hope  the 
result  of  further  deliberation  will  lead  to  your  agreeing  upon  something  to  re- 
commend to  me. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  277 


SEVENTH   SITTING. 


Legislative  Assembly,  Toronto. 

Thursday,  18th  January,  1912,  10.30  a.m. 

Present:     Sir  William  R.  Meredith,  Commissioner. 
Mr.  W.  B.  Wilkinson,  Law  Clerk. 

The  Commissioner:  Mr.  Wegenast,  if  you  are  calling  witnesses  as  to  facts 
they  had  better  be  sworn,  but  if  it  is  simply  opinion  evidence  they  need  not  be 
sworn. 

Canadian  Manufacturers'  Case. 

Mr.  Wegenast:  My  intention  was  to  first  outline  our  position  by  way  of  a 
preliminary  statement,  and  to  support  that  by  a  brief  that  is  not  yet  quite  complete. 
I  will  hand  you  the  brief  subject  to  some  additions  which  I  would  like  to  make 
later. 

The  Commissioner:  A  suggestion  has  been  made  to  me  that  the  manu- 
facturers of  Hamilton  wish  to  be  heard  separately. 

Mr.  Wegenast:  I  had  a  communication  from  one  of  the  manufacturers  in 
Hamilton,  who  thought  it  would  be  more  convenient  for  some  of  them  if  they 
could  be  heard  at  that  city.  It  is  not  entirely  essential,  so  far  as  we  are  concerned, 
but  it  would  be  merely  a  matter  of  convenience. 

The  Commissioner  :     I  will  arrange  for  a  meeting  there. 

Mr.  Wegenast  :  There  are  a  number  of  members  of  the  committee  who  have 
been  in  charge  of  this  matter  for  the  Manufacturers'  Association  in  different  parts 
of  the  Province,  who  have  found  it  difficult  to  appear  here  at  the  times  fixed  for 
hearings,  and  I  think  it  would  be  convenient  if  a  meeting  could  be  held  either  at 
Brantford  or  Hamilton. 

The  Commissioner:     Hamilton  will  be  the  place. 

Mr.  Wegenast:  I  may  say  that  our  Association  represents  in  the  neighbour- 
hood of  eighty  or  ninety  per  cent,  of  the  manufacturers  of  the  whole  Dominion. 

The  Commissioner:     That  is  the  large  manufacturers,  I  suppose. 

Mr.  Wegenast:  Those  who  come  within  the  qualifications  necessary  for 
membership.  It  is  necessary  for  a  manufacturer  to  employ  at  least  five  persons  in 
some  branch  of  actual  manufacturing  in  this  country. 

The  Commissioner:     What  do  you  include  in  manufacturing? 

Mr.  Wegenast:  Well,  I  suppose  everything  that  would  be  included  under 
that  term  as  used  in  the  popular  sense. 

The  Commissioner:     Is  a  man  constructing  a  sewer  a  manufacturer? 

Mr.  Wegenast  :  No,  and  of  course  we  do  not  include,  to  any  extent  at  all 
events,  manufacturers  whose  scope  is  merely  local,  such  as  sash  and  door  factories, 
and  local  brick  yards,  and  industries  of  a  like  nature;  but  of  those  who  are 
eligible  for  membership  in  the  Association  we  include  somewhere  in  the  neighbour- 
hood of  80  or  90  per  cent.  I  think  the  percentage  numerically  would  be  about  75, 
but  on  the  basis  of  the  number  of  employees  and  the  amount  of  capital  employed 
it  would  be  nearly  90  per  cent.     The  Association  presents  an  aggregate  pay-roll 


278  MINUTES  OF  EVIDENCE:  No.  65 

of  in  the  neighborhood  of  $250,000,000  annually,  and  of  that  about  $150,000,000 
is  in  the  Province  of  Ontario. 

The  Commissioner:  Would  that  be  calculated  to  shrink  if  the  Washington 
law  were  applied? 

Mr.  Wegenast  :  I  do  not  exactly  see  the  point,  your  Lordship  ? 

The  Commissioner:  If  you  had  to  pay  on  the  amount  would  you  give  us  a 
much  less  view  of  what  your  pay-roll  was  ? 

Mr.  Wegenast:  I  think  possibly  the  proportions  might  suffer  to  the  pre- 
judice of  the  Province  of  Ontario  in  that  event.  I  mean  to  say  that  the  matter  is 
one  of  very  serious  import  to  the  manufacturers  of  Ontario,  and  that  we  have  given 
the  matter  consideration  corresponding  to  its  importance.  We  view  the  matter, 
not  only  from  the  standpoint  of  the  employers  of  the  Province  of  Ontario,  but  from 
the  standpoint  of  the  influence  of  whatever  legislation  is  adopted  upon  the  other 
Provinces.  So  far  as  the  desirability  of  a  change  in  the  law  is  concerned  I  do  not 
know  that  there  would  be  anything  gained  by  my  taking  up  the  time  of  the  Com- 
missioner in  supporting  what  has  already  been  said  on  behalf  of  the  labour  interests. 
We  agree  entirely  with  them  when  they  say  a  change  is  necessary.  Without  going 
into  that  any  further,  I  may  say  that  so  far  as  we  are  concerned  the  discussion 
assumes  the  form  rather  of  a  discussion  of  means  than  a  discussion  of  the  de- 
sirability of  some  compensation  system.  When  we  come  to  outline  our 
views  and  propositions  I  have  very  little  doubt  that  they  will  be  con- 
sidered as  somewhat  advanced,  and  I  have  very  little  doubt  that  there  may  be 
objections  on  the  part  of  manufacturers,  and  possibly  of  members  of  our  Asso- 
ciation, to  the  breadth  of  our  propositions,  but  they  have  been  the  subject  of  the 
most  careful  consideration  by  a  very  strong  committee  of  prominent  business  men. 
They  have  been,  also,  unanimously  approved  by  the  executive  council  of  the 
Association,  a  body  consisting  of  several  hundreds  of  the  most  prominent  business 
men  of  Canada,  and  they  represent  the  results  of  very  careful  study  of  the  different 
phases  of  the  problem. 

We  would  regard  it  as  most  unfortunate  if  at  this  stage  in  the  history  of  the 
Province  legislation  were  adopted  which  did  not  represent  the  accumulated  exper- 
ience of  other  jurisdictions,  as  well  as  the  wisdom  and  ingenuity  of  our  own 
Province,  and  in  view  of  the  fact  that  the  Province  of  Ontario  has  been  a  pioneer 
in  many  excellent  types  of  legislation  which  have  afterwards  been  adopted  by  the 
other  Provinces,  we  have  made  this  the  occasion  of  the  most  careful  consideration 
of  the  whole  subject  from  a  national,  rather  than  a  provincial,  standpoint. 

It  means  to  our  Association  an  increase  in  the  annual  cost  of  between  $4,000,- 
000  and  $6,000,000  to  adopt  almost  any  form  of  modern  Compensation  Act,  and 
from  a  study  of  the  different  systems  we  find  that  it  will  make  a  difference  of 
several  million  dollars  in  the  efficiency  of  the  administration  of  compensation, 
whether  a  certain  type  of  system  is  adopted  in  preference  to  other  types  or  systems. 

The  Commissioner:  If  your  figures  of  $4,000,000  to  $6,000,000  are  right 
is  the  Washington  proposition  not  an  absurd  one?  What  percentage  would  that 
be  on  your  wage-roll? 

Mr.  Wegenast:  The  wage-roll  represented  by  the  Province  of  Ontario?  I 
am  speaking  now  simply  from  the  provincial  standpoint. 

The  Commissioner:  So  I  understand,  but  if  you  have  $250,000,000  of  wages 
and  from  $4,000,000  to  $6,000,000  to  be  paid  out  in  compensation,  that  is  one- 
sixtieth  of  your  whole  wage-bill.    Is  there  not  some  mistake  about  that? 

Mr.  Wegenast  :  No,  I  was  speaking  now  only  on  the  basis  of  the  $150,000,000, 
not  the  $250,000,000.     It  is  on  the  basis  of  $150,000,000,  taking  the  percentage 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  279 

as  an  average  on  the  rates  now  quoted  and  charged  by  liability  companies. 

The  Commissioner:     What  is  the  average  rate? 

Me.  Wegenast:  I  propose  to  discuss  that  at  a  later  stage,  but  I  may  as  well 
now  refer  to  the  figures  in  the  brief. 

The  Commissioner:  I  only  wanted  it  roughly  now,  not  to  go  into  the  detail 
of  it. 

Mr.  Wegenast:  Between  two  and  three  per  cent.,  or  possibly  higher.  The 
lowest  rate  under  the  Washington  Act  is  two  and  a  half  per  cent.  I  think,  and  the 
highest  rate  is  ten  per  cent.,  which  is,  of  course,  very  high.  Under  the  Washington 
Act  I  think  a  rough  guess  would  place  the  average  rate  at  three  and  a  half  to  four 
per  cent.  I  am  assuming  a  somewhat  lower  rate  because  I  do  not  think  anybody 
seriously  contemplates  such  an  elaborate  scale  of  benefits  as  that  provided  by  the 
Washington  Act.  I  have  figured  it  out  on  what  I  would  consider  a  fair  average 
basis. 

The  Commissioner  :  That  does  not  produce  on  $150,000,000  anything  like 
two  and  a  half  per  cent.,  does  it? 

Mr.  Wegenast:     Two  per  cent,  would  give  $3,000,000  on  $150,000,000. 

The  Commissioner:     Yes. 

Mr.  Wegenast  :  I  am  not  at  all  at  this  stage  attempting  to  calculate  the 
figures  accurately.  I  am  merely  saying  that  for  the  purpose  of  illustration,  and 
what  I  was  referring  to  was  that  certain  forms  of  compensation  acts  show  results 
in  which  a  large  proportion  of  waste  appears. 

The  Commissioner  :  May  I  ask  you  are  there  any  statistics  of  the  amounts 
paid  out  under  our  law? 

Mr.  Wegenast  : '  I  have  not  found  any,  your  Lordship. 

The  Commissioner  :  Because  these  figures  seem  to  me  to  be  startling.  I 
did  not  believe  there  were  as  many  hundred  thousands  of  dollars  as  this,  or  any- 
thing like  it,  paid  out. 

Mr.  Wegenast  :  I  think  probably  not,  but  I  didn't  -think  it  was  necessary 
to  go  into  that  because  I  have  calculated  everything  on  the  assumption  that  there 
would,  of  course,  be  an  act  of  much  larger  scope  than  anything  we  have  at  present. 
I  do  not  imagine  there  is  anything  like  that  amount  paid  out,  and  I  merely  wished 
to  make  that  remark  to  emphasize  the  importance  of  the  matter  to  us,  and  to  give 
point  to  the  proposal  that  we  have  to  make,  particularly  in  view  of  the  feature  which 
I  have  just  pointed  out,  that  under  some  systems  a  very  large  proportion  of  the 
money  that  is  paid  out  by  way  of  insurance  premiums,  by  employers,  is  wrasted 
in  the  course  of  being  transferred  to  the  workmen. 

The  Commissioner:     Rather  is  it  not  being  kept  away  from  them? 

Mr.  Wegenast  :  I  am  speaking  of  the  systems  of  compensation.  I  am  not 
speaking  of  our  own  system,  because  I  quite  appreciate  that  it  cannot  be  considered 
a  system  of  workmen's  compensation  at  all.  I  do  not  know  who  happens  to  be 
responsible  for  the  name  which  is  appended  to  the  present  act  on  our  statute  books, 
and  it  may  not  perhaps  be  amiss  to  say  that  it  is  not  a  Workmen's  Compensation 
Act,  but  an  Employers'  Liability  Act.  I  may  say  the  British  Act  in  its  present 
form  is  not  a  AYorkmen's  Compensation  Act,  but  an  Employers'  Liability  Act,  in  the 
modern  sense  of  the  term. 

We  have  considered  rather  carefully  a  good  many  of  the  details  of  our  pro- 
posals, and  are  prepared  at  the  proper  time  to  discuss  them,  but  the  brief  which  I 
am  presenting,  and  the  statement  which  I  desire  to  make,  are  confined  almost  solely 
to  general  principles  and  any  references  to  any  act  or  proposed  act  are  only  by 


280  MINUTES  OF  EVIDENCE:  No.  65 


way  of  illustration.  If  our  proposals  should  appear  drastic  and  should  appear  ad- 
vanced, or  should  be  called  even  socialistic,  it  must  be  remembered  that  they  are 
supported,  as  I  have  said,  by  the  opinion  of  the  solid  business  community  of  this 
Province,  and  in  fact  of  Canada.  They  are  also  supported  by  the  unanimous  offi- 
cial opinion  of  the  manufacturing  bodies  of  the  United  States. 

I  would  like  to  refer  just  for  a  moment  to  the  work  of  Messrs.  Schwedtman  and 
Emery,  who  were  commissioned  by  the  National  Manufacturers'  Association  of  the 
United  States  to  investigate  the  systems  of  Europe,  with  a  view  to  formulating  a 
policy  for  that  body  on  the  subject  of  workmen's  compensation.  These  gentlemen 
spent  four  months  in  Europe,  and  the  Association  spent  on  the  whole  investigation 
some  $20,000.  I  was  in  New  York  at  the  meeting  of  the  National  Association 
when  the  report  of  these  gentlemen  was  brought  in.  The  report  was  received  with 
feelings  not  far  short  of  amazement.  Up  to  the  time  that  the  National  Association 
took  the  matter  up  the  writings  upon  the  subject  had  been  very  largely  from  the 
labour  standpoint,  or  from  the  academic  standpoint,  and  it  was  nothing  short  of 
startling  to  the  manufacturers  to  find  that  their  commissioners,  one  of  whom  was 
himself  a  manufacturer  and  a  practical  engineer,  and  the  other  an  attorney,  sup- 
ported by  the  unanimous  vote  of  the  committee,  bore  out  almost  in  its  entirety, 
or  in  their  entirety,  the  opinions  which  had  been  formulated  in  late  years  by  the 
expert  investigators  on  behalf  of  the  labour  interests  and  the  academic  bodies.  There 
are  one  or  two  points  in  which  their  findings  differ,  but  in  the  main  they  are  in 
accord,  as  I  have  stated,  with  the  opinions  of  those  representing  the  labor  interests 
and  of  those  who  have  investigated  the  subject  for  the  educational  institutions  of 
the  United  States;  and  I  may  say  right  here  that  our  views  upon  the  subject,  and 
the  proposals  that  we  will  make  are  not  less  advanced,  but  are,  if  anything,  more 
advanced  than  those  made  in  the  statement  presented  by  the  repesentatives  of  the 
Trades  and  Labour  Congress  of  Canada. 

Without  saying  anything  more  by  way  of  preliminary  remarks  I  would  like 
to  refer  to  the  first  portion  of  the  brief  which  I  have  placed  in  your  Lordship's  hands. 
The  first  few  pages  of  the  brief  contain  an  outline  of  our  proposition,  which  is 
further  elaborated  in  the  latter  part  of  the  brief.  For  purposes  of  outline  it  is 
necessary  to  refer  only  to  the  first  half  dozen  pages.  I  have  already  referred  to  and 
placed  on  record  the  resolution  passed  at  our  annual  meeting  under  which  the  com- 
mittee in  charge  of  this  matter  have  acted,  and  I  would  like  to  point  out  that  the 
matter  was  approached  there,  and  is  being  approached  by  our  Association,  from 
the  standpoint  first  and  foremost  of  conservation. 

A  good  deal  is  being  said  in  late  years  about  the  conservation  of  our  natural 
resources,  and  I  need  not  enforce  by  elaborate  argument  the  obvious  inference 
that  it  is  equally  important,  and  in  fact  more  important,  that  every  effort  should 
be  made  even  in  a  young  country  like  ours  to  conserve  the  industrial  efficiency  of 
our  workmen.  The  first  paragraph  of  the  resolution  refers  to  that  feature,  and  that 
is  the  feature  we  have  kept  most  prominently  in  view  in  considering  the  question. 
"Resolved  tbat  conservation  of  industrial  efficiency  by  organized  and  systematic 
means  for  the  protection  of  the  life  and  health  of  wage-workers,  and  compensation 
for  the  results  of  industrial  accidents  is  a  matter  which  demands  the  careful  atten- 
tion of  this  Association." 

In  the  statement  of  principles  which  appears  on  page  "4,"  I  think,  of  the 
brief,  we  have  placed  first  of  all  the  clauses  emphasizing  the  importance  of  this 
feature  of  conservation  of  industrial  efficiency  by  organized  and  systematic  effort 
in  the  direction  of  the  prevention  of  accidents.     The  first  principle  reads  as  follows: 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  281 

"For  reasons  both  humanitarian  and  economic  the  prevention  of  accidents 
should  be  a  prime  consideration  in  any  scheme  of  workmen's  compensation,  and  no 
systems  can  be  satisfactory  which  will  not  tend  to  produce  the  maximum  of  effort 
and  result  in  conserving  the  life,  health,  and  industrial  efficiency  of  the  workman." 

I  do  not  propose  at  this  stage  to  comment  further  upon  these  principles  than 
simply  to  give  some  brief  explanation  where  necessary  as  to  the  meaning.  I  find 
that  the  meaning  of  our  committee,  and  the  meaning  which  I  had  attached  to 
the  second  principle,  has  been  misapprehended  by  some  of  the  representatives  of 
the  labour  interests  who  have  read  it,  and  the  only  comment  which  I  desire  to  make 
upon  it  is  by  way  of  enforcing  this  view,  that  the  second  principle  is  intended  to 
enunciate  in  its  broadest  form  the  principle  of  professional  risk.  That  is  the  theory 
that  the  cost  of  industrial  accidents,  the  cost  of  compensating  workmen  for  the 
results  of  industrial  accidents,  should  be  thrown  upon  the  industry  and  included 
in  the  price  of  the  product  and  charged  to  the  consumer.  It  is  not  intended  to 
embody  anything  in  the  shape  of  the  doctrine  of  contributory  negligence,  and  if 
such  a  view  is  gathered  from  that  statement  then  the  statement  has  been  wrongly 
worded ;  it  reads  as  follows : 

"  Relief  should  be  provided  in  every  case  of  injury  arising  out  of  industrial 
accident.  Such  relief  should  not  be  contingent  upon  proof  of  fault  on  the  part 
of  the  employer  but  gross  carelessness,  drunkenness  or  intentional  wrong  on  the  part 
of  the  workmen  should  be  penalized  in  some  way." 

The  Commissioner:     Do  I  understand  these  are  elaborated  later  on? 

Mr.  Wegenast:.  Yes. 

The  Commissioner  :  And  an  explanation  of  what  you  mean  by  "  penalized  " 
given  ? 

Mr-  Wegenast:  Not  very  much  of  an  explanation  of  that,  your  Lordship. 
I  am  personally  very  much  in  doubt  as  to  what  form  the  penalty  should  take,  and 
there  is  the  obvious  difficulty  always  arising  that  any  penalty  which  is  inflicted 
falls  to  a  very  large  extent  on  the  innocent  dependants.  Still  there  is  the  vital 
consideration  that  there  must  be  some  way  of  bringing  home  to  the  workman  the 
result  of  misconduct.  I  am  not  wedded  at  all  to  any  form  of  words.  I  know  there 
has  been  a  good  deal  of  criticism  of  the  words  "  gross  carelessness,"  and  I  am 
quite  willing  to  have  that  principle  read  in  any  other  form  which  embodies  the 
general  idea  that  misconduct  on  the  part  of  the  workman  must  be  brought  home 
to  him  in  some  way. 

The  third  principle  is :  "  The  system  of  relief  should  be  adapted  to  cover 
wage-workers  in  every  industry  or  calling  involving  any  occupational  risk  and 
should  not  be  confined  to  such  industries  as  rail-roading,  manufacturing,  build- 
ing, etc." 

The  Commissioner:  Why  didn't  you  put  what  you  meant,  that  it  should 
extend  to  farmers  and  domestic  servants? 

Mr.  Wegenast:  We  did  not  mean  that,  your  Lordship.  We  mean  exactly 
what  is  stated  there.  I  do  not  know  that  there  is  any  reason  for,  and  there  may 
be  many  reasons  against,  our  exhibiting  undue  solicitude  for  the  welfare  of  the 
farming  community  or  the  class  of  domestic  servants.  We  are  concerned  primarily 
with  the  interests  of  our  own  members,  and  with  the  establishment  of  a  scheme 
which  shall  represent  a  permanent  and  satisfactory  solution  of  this  problem.  At 
the  same  time  we  realize  that  any  scheme  which  is  adopted  will  in  all  probability 
be  ultimately  extended  to  cover  all  classes  of  wage-workers. 

The  Commissioner:     Now,  is  there  any  design  in  this?     Are  you  proposing 


282  MINUTES  OF  EVIDENCE:  No.  65 

a  Bill  that  will  be  defeated  because  it  is  loaded  down  with  clauses  that  will  be  un- 
popular with  the  farming  community  and  the  general  public  ? 

Mr.  Wegenast:  No.  Perhaps  I  may  take  this  opportunity  to  express  as 
strongly  as  I  may,  and  as  strongly  as  I  can,  this  feature  of  the  attitude  of  the 
Manufacturers'  Association.  We  have  approached  the  subject — and  I  am  speaking 
for  the  Committee  in  charge  of  this  matter  and  for  myself — with  a  view  not  to 
gaining  any  narrow  advantage  for  ourselves,  although  I  do  not  want  to  claim  for  us 
any  superiority  over  the  ordinary  run  of  humankind.  We  have  endeavoured  to 
approach  this  subject  from  the  broad  standpoint  of  the  desirability  of  a  satisfac- 
tory solution,  a  solution  satisfactory  to  the  employers,  to  the  employees  and  to  the 
community  at  large.  We  think  we  have  everything  to  gain  by  such  a  solution 
and  by  permanent  conditions,  and  if  there  is  any  particular  advantage  to  be  gained 
by  our  Association,  and  the  employing  interests  generally  throughout  the  country, 
it  will  consist  rather  in  the  establishment  of  a  permanently  satisfactory  condition. 
We  have  more  to  lose  by  unstable  and  unsatisfactory  economic  conditions  than  we 
have  by  the  imposition  of  the  burden  of  compensating  the  workmen  who  are 
injured.  I  want  to  say  this  about  all  these  principles,  that  they  are  drawn  and  have 
been  adopted  with  that  in  view.  We  do  not  want  to  meddle  with  the  affairs  of  the 
farmer  any  more  than  to  consider  that  in  a  general  scheme  which  is  adopted  it 
must  be  taken  into  account  that  this  scheme  will  in  all  probability  be  ultimately 
extended  to  farm  labourers  and  to  domestic  servants,  and  it  should  be  such  a 
scheme  as  is  fairly  adapted  for  extension  to  these  classes. 

The  fourth  principle  is :  "  The  relief  should  be  as  far  as  practicable  by  way 
of  substitution  for  the  wages  of  which  the  injured  workman  and  his  dependants 
are  deprived  by  the  injury.  It  should  as  a  rule  be  periodical  and  not  in  a  lump 
sum." 

The  fifth  principle  is :  "  The  relief  should  be  certain.  It  should  not  depend 
upon  the  continued  solvency  of  the  employer  in  whose  service  the  injury  was  sus- 
tained." 

The  Commissioner:  Do  you  suggest  in  regard  to  that  in  your  brief  how  that 
is  to  be  secured  ? 

Mr.  Wegenast  :     Yes,  we  have  gone  into  that  'quite  thoroughly. 

The  sixth  principle  is :  "The  amount  of  compensation  should  be  definite  and 
ascertainable  both  to  the  workman  and  the  employer.  The  system  should  entirely 
displace  the  present  method  of  compensation  by  an  action  for  damages,  and  the 
employer  should  not  be  subjected  to  any  further  or  other  liability  except  in  cases 
of  gross  carelessness  or  intentional  wrong  on  the  part  of  the  employer." 

The  Commissioner:     I  see  you  eliminate  drunkenness  there. 

Mr.  Wegenast:  That  has  been  pointed  out  to  me.  I  am  quite  ready  to 
have  it  included. 

The  Commissioner  :     It  is  an  invidious  distinction,  I  suppose :  that  is  all. 

Mr.  Wegenast:  I  may  remark  that  it  is  intended  for  the  statement  to  em- 
body the  broad  principle  that  while  a  scheme  of  compensation  would  take  the  place 
of  the  present  remedies  at  law,  for  reasons  which  I  need  not  go  into  here,  there 
should  be  some  way  of  bringing  home  to  the  individual  employer  as  well  as  the 
individual  employee  the  responsibility  of  misconduct. 

The  Commissioner:  There  is  a  great  deal  of  trouble  involved  in  that. 
That  will  raise  again  all  these  questions:  You  say  "The  employer."  Take  a 
joint  stock  company.  Does  that  include  the  vice-principal,  as  they  call  him,  the 
superintendent,  or  just  the  man  who  owns  the  concern? 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  283 

Mr.  Wegenast  :  I  am  not  speaking  there,  your  Lordship,  of  the  cases  which 
are  covered  by  the  general  term  employed  in  our  present  law. 

The  Commissioner  :  Do  not  misunderstand  me.  You  are  proposing  to  do 
away  entirely  with  the  common  law  liability? 

Mr.  Wegenast:    Yes. 

The  Commissioner:  Except  in  the  case  of  gross  carelessness  or  intentional 
wrong  on  the  part  of  the  employer. 

Mr.  Wegenast:  No,  that  is  not  the  intention.  The  intention  of  that  prin- 
ciple or  statement  is  that  there  should  lie  some  way  of  penalizing  the  employer,  not 
necessarily  by  making  him  subject  to  a  common  law  action,  because  on  the  whole 
I  think  the  bulk  of  opinion  is  against  the  retention  of  that  remedy,  but  possibly,  as 
under  the  Washington  Act,  by  the  imposition  of  a  fine  or  a  penalty  which  will  go 
to  the  general  insurance  fund. 

The  Commissioner:  It  would  still  leave  that  difficulty  that  I  have  sug- 
gested. Would  it  be  misconduct  on  the  part  of  the  owner  of  the  business,  which 
in  a  great  many  cases  would  be  a  joint  stock  companj^,  or  would  it  be  the  men  who 
are  in  direct  or  immediate  charge  of  the  operation? 

Mr.  Wegenast:  I  have  not  considered  that  phase  of  it  particularly,  and  our 
committee  did  not  consider  it,  but  I  should  think,  speaking  offhand,  there  is 
no  reason  why  misconduct  on  the  part  of  the  representative  of  a  company,  if  he 
is  the  representative  of  the  company,  in  its  capacity  as  employer,  should  not  be 
penalized — if  he  happens  to  be  the  representative  of  an  incorporated  company.  For 
instance,  supposing  it  is  found  an  incorporated  company,  acting  as  employer, 
omits  to  provide  proper  safeguards,  or  omits  a  statutory  duty  of  any  other  nature, 
I  do  not  see  why  the  company  should  not  be  penalized  as  well  as  an  individual; 
and  speaking  for  the  manufacturers,  I  think  I  can  state  that  we  certainly  would 
not  feel  like  drawing  any  distinction. 

The  Commissioner  :  The  Washington  Act  is  considerably  limited.  "  If 
any  workman  shall  be  injured  because  of  the  absence  of  any  safeguard  or  protection 
required  to  be  provided  or  maintained  by  or  pursuant  to  any  law  or  ordinance  or 
any  departmental  regulation  under  a  Statute  ....  the  employer  shall  within 
ten  days  after  demand  therefor  pay  into  the  accident  fund,  in  addition  to  the  sum 
required  by  section  '  4 '  to  be  paid,"  and  then  the  sums  are  stated.  Yours  would 
be  broader  than  that,  apparently. 

Mr.  Wegenast:  Well,  I  am  not  wedded  to  any  form  of  words.  I  am  not 
thinking  of  the  cases  that  come  under  the  ordinary  term,  "  negligence."  I  do  not 
know  but  that  the  Washington  Act  may  be  too  narrow.  I  wouldn't  like  to  say  that. 
We  have  been  considering  the  matter  simply  from  the  broad  general  standpoint, 
and  it  is  a  matter  of  general  expediency  how  far  these  different  clauses  should  go 
when  it  comes  to  the  drafting  of  an  act.  The  details  of  the  working,  and  the 
details  of  the  scope  of  such  penalizing  sections  are,  I  presume,  a  matter  for  sub- 
sequent consideration. 

The  seventh  principle  is :  "  The  funds  for  relief  should  be  provided  by  joint 
contributions  from  employers,  workmen  and  the  State.  Employers  and  workmen 
should  pay  in  such  proportion  as  represent  the  number  of  accidents  occurring  by 
reason  of  the  hazard  of  the  industry  and  the  fault  of  the  employer  on  the  one  hand 
and  the  fault  of  the  workman  on  the  other." 

The  Commissioner  :     Is  that  not  exhaustive  of  the  whole  range  of  accidents  ? 

Mr.  Wegenast:     Yes. 

The  Commissioner  :     Then  what  would  vou  leave  for  the  State  ? 


284  MINUTES  OF  EVIDENCE:  No.  65 

Mr.  Wegenast  :     The  State  should  bear,  we  submit,  the  cost  of  administering 
the  system,  and  the  arguments  in  favour  of  that  I  propose  to  go  into  later. 
The  Commissioner:     That  is  elaborated  later  on? 

Mr.  Wegenast  :  Yes,  but  I  point  out  that  the  State  now  pays  for  the  expense 
of  litigation  to  a  considerable  extent,  and  that  the  general  community  would 
greatly  benefit  by  having  the  dependants  of  injured  workmen,  and  the  workmen 
themselves,  taken  care  of  by  this  method,  rather  than  being  thrown  upon  the  com- 
munity at  large,  either  upon  the  Poor-Law  system  or  upon  public  charity. 

The  eighth  principle  is :  "The  system  of  relief  should  be  such  as  to  secure  in 
its  administration  a  maximum  of  efficiency  and  economy,  and  as  large  a  proportion 
as  possible  of  the  money  contributed  should  be  actually  paid  out  in  compensation." 
That  is,  of  course,  so  obvious  that  it  needs  no  explanation  and  almost  no  sup- 
port, but  at  the  same  time  is  a  very  vital  element  for  consideration. 

The  ninth  principle  is :  "  The  procedure  for  the  adjustment  of  claims  should 
be  as  far  as  possible  dissociated  from  the  regular  courts  of  law.  It  should  be 
simple,  and  calculated  to  involve  in  its  operation  a  minimum  of  friction  between 
employer  and  employee." 

The  Commissioner  :     Do  you  want  the  Juvenile  Court  brought  in  ? 
Mr.  Wegenast  :     Well,  I  would  have  to  look  into  that. 
The  Commissioner:     Of  course,  I  am  only  joking. 

Mr.  Wegenast:  The  idea  is  a  body  should  be  appointed  for  the  purpose  of 
adjudicating  claims,  with  an  appeal  only  on  questions  of  law — a  body  similar  in 
its  scope  or  intention  to  the  Eailway  Board. 

Then  the  tenth  principle  is :  "  The  system  of  compensation  should  be  directly 
associated  with  a  system  of  inspection  with  a  view  to  the  prevention  of  accidents 
and  a  system  of  prompt  and  expert  medical  attendance  to  mitigate  the  effect  of 
the  injuries." 

That  is  in  a  sense  included  in  the  first  clause,  but  is  repeated  here  for  the  pur- 
pose of  discussing  some  other  aspects. 

Then  the  eleventh  principle  is :  "  The  system  should  be  such  as  to  secure  as 
liberal  a  measure  of  relief  as  possible  without  undue  strain  upon  industry." 

The  twelfth  is :  "  The  system  should  be  such  as  to  afford  some  promise  of  per- 
manency." 

The  Commissioner:  There  is  nothing  can  be  permanent  in  this  world.  If 
you  had  said  "  a  promise  of  some  degree  of  permanency  "  it  might  have  been  all 
right. 

Mr.  Wegenast:  I  think  probably  I  should  have  put  it  in  that  way.  I  am 
glad  to  have  your  Lordship's  suggestion. 

The  next  portion  is  a  brief  analysis  of  the  systems  in  the  different  countries 
of  the  world,  which  I  may  as  well  read. 

"  Practically  all  workmen's  compensation  legislation  is  an  effort  to  embody 
in  some  form  and  in  some  degree  the  second  of  the  principles  above  laid  down, 
namely,  that  a  wage-worker  should  receive  compensation  or  relief  in  case  of  injury 
occurring  in  the  course  of  his  employment  regardless  of  questions  of  fault  on  the 
part  of  the  workman.  This  has  been  called  the  principle  of  'professional  risk/ 
It  is  based  upon  the  theory  that  the  cost  of  human  wear  and  tear  should  be  thrown 
largely,  if  not  wholly,  upon  the  industry  and  included  in  the  price  charged  to  the 
consumer  for  the  product  of  the  industry.  To  what  extent  this  theory  is  equitable 
and  economically  sound,  and  to  what  extent  it  conflicts  with  the  legal  doctrine 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  285 

that  no  man  should  be  responsible  for  something  not  his  fault  need  not  be  dis- 
cussed here.     The  theory  is  the  basis  of  all  workmen's  compensation  legislation." 

"  The  different  compensation  systems  of  the  world  exhibit  three  distinct 
methods  of  applying  the  theory  of  professional  risk.  These  methods  may  be 
respectively  termed  the  individual  liability  method,  the  collective  liability  method 
and  the  state  liability  or  state  insurance  method.  Every  system  in  the  world  can 
be  classified  under  one  or  other  of  these  heads." 

Mr.  Bancroft:  May  I  ask  a  question?  The  statement  here  says,  "It  is 
based  upon  the  theory  that  the  cost  of  human  wear  and  tear  should  be  thrown 
largely,  if  not  wholly,  upon  the  industry  and  included  in  the  price  charged  to  the 
consumer  for  the  product  of  the  industry."  Would  it  be  right?  If  the  workmen 
have  got  to  contribute,  according  to  their  proposal,  and  the  ultimate  cost  is  upon 
the  consumer,  they  are  making  the  workmen  pay  at  both  ends. 

The  Commissioner:     So  does  the  manufacturer.     Both  pay  at  both  ends. 

Mr.  Wegenast:  And  the  employer,  of  course,  pays  it  by  way  of  wages. 
The  question  of  the  power  of  the  workman  to  pay,  and  the  question  of  his  paying 
at  all,  is  largely  involved  in  the  question  of  the  amount  of  his  wages  and  his  get- 
ting wages  at  all. 

The  Commissioner:  Let  me  ask  you  a  question  there.  It  is  stated  in  some 
quarters  that  the  cost  involved  in  such  a  law  as  is  suggested  cannot  in  certain 
industries  be  put  upon  the  consumer,  that  the  price  is  a  world's  price,  and  not 
subject  to  control  by  the  industry  in  a  particular  country. 

Mr.  Wegenast:  I  think  that  is  correct,  your  Lordship,  and  it  is  one  of  the 
difficulties  that  we  have  to  reckon  with,  but  the  difficulty  does  not  go  deeply 
enough  to  abrogate  the  general  principle.  There  is  no  doubt  at  all  that  the  manu- 
facturers of  this  Province  will  be  prejudiced  in  competition  with  jurisdictions  where 
no  compensation  system  exists,  corresponding  to  ours. 

The  Commissioner:  I  was  speaking  rather  of  a  different  class.  I  was 
speaking  of  the  producers  of  mineral  wealth  or  producers  from  the  forest  or  the 
farm?     How  can  they  regulate  prices?     How  can  they  add  to  their  price? 

Mr.  Wegenast:  Well,  the  distinction  is  more  a  distinction  of  degree  than 
of  kind,  because  after  all  the  manufacturer  is  a  producer  in  very  much  the  same 
sense  as  the  farmer. 

The  Commissioner  :     He  can  add  it  on  to  his  price,  within  certain  limits  ? 

Mr.  Wegenast:     Of  course. 

The  Commissioner:  Take  the  people  who  are  producing  silver.  They  can- 
not change  the  price  of  silver,  and  it  might  work  out  to  be  unjust  in  their  case. 

Mr.  Wegenast:     And  the  same  thing  is  true  of  wheat,  of  course. 

The  Commissioner:     And  probably  so  of  the  product  of  the  forest. 

Mr.  Wegenast:  And  certainly  so  of  gold,  the  standard  of  exchange.  In 
those  cases  it  creates  a  disadvantage,  but  there  can  be  no  doubt  the  whole  idea  of 
workmen's  compensation  is  founded  upon  that  general  principle  that  the  employer 
as  the  entrepreneur,  which  is  the  French  term — and  the  translated  term  has,  how- 
ever, another  shade  of  meaning — the  undertaker  of  the  industry  is  in  a  position  to 
place  the  charge  of  human  wear  and  tear  against  the  product,  and  get  it  out  of 
the  consumer. 

The  Commissioner:  Apparently  your  view  is  that  it  is  anomalous  that  the 
manufacturer  bears  the  burden  of  any  wear  and  tear  of  his  machinery  ordinarily, 
but  not  the  burden  of  the  wear  and  tear  of  his  human  machinery. 

Mr.  Wegenast:     We  do  not  quarrel  with  the  theory  at  all.     I  do  not  know 


286  MINUTES  OF  EVIDENCE:  No.  65 


that  it  is  necessary  for  my  purposes  at  present  to  affirm  or  deny.  All  I  am  saying 
is  that  that  is  the  general  theory  upon  which  all  workmen's  compensation  legisla- 
tion is  based,  and  probably  later  on  I  shall  be  able  to  show  that  it  is  regarded  in 
that  way  by  all  the  writers  and  authorities  on  the  subject. 

Then  I  continue :  "  Under  an  individual  liability  system  the  obligation  to 
compensate  workmen  is  thrown  upon  the  individual  employer  as  an  element  of  the 
relationship  of  employer  and  employee.  The  law  includes  a  term  in  every  contract 
of  employment  by  which  the  employer  assumes  an  obligation  more  or  less  extensive 
to  indemnify  the  workmen  for  injuries  received  in  the  course  of,  or  in  connection 
with.,  the  employment.  The  injured  employee  looks  for  his  relief  to  his  employer, 
who  thus  becomes  an  individual  insurer  of  the  workman  against  accidents.  The 
principle  of  individual  liability  is  illustrated  in  the  English  Workmen's  Compen- 
sation Act,  and  in  the  acts  in  force  in  some  of  the  Provinces  of  Canada.  Under 
these  acts  employers  are  required,  regardless  of  questions  of  fault,  to  compensate 
their  workmen  for  injuries  arising  out  of,  or  in  the  course  of,  the  employment. 
Employers  are,  of  course,  encouraged  and  permitted  to  insure  themselves  against 
the  liability  under  the  act  by  some  form  of  insurance,  but  the  initial  liability  rests 
upon  the  individual  employer,  and  the  insurance  effected  is  uniformly  for  the  pur- 
pose of  protecting  the  employer  against  this  liability  and  not  for  the  purpose  of 
insuring  the  workman  against  accidents." 

That  is  a  distinction  which  I  wish  to  emphasize  particularly  later  on,  the  dis- 
tinction between  employers'  liability  insurance  and  real  accident  insurance.  In  a 
system  of  employers'  liability  insurance  it  is  the  employer  who  is  insured.  In 
accident  insurance  and  in  a  real  system  of  workmen's  compensation  it  is  the  work- 
man who  is  insured. 

The  Commissioner:  There  would  be  no  difficulty  under  the  present  system 
if  the  employer  insured  his  workmen  against  the  accident  within  the  scope  of  the 
Workmen's  Compensation  Act? 

Mr.  Wegenast  :  But  he  does  not  do  it,  and  as  soon  as  you  compel  him  to  do 
it  you  have  a  compensation  system. 

Then  I  continue :  Collective  liability : 

"  Under  this  method  the  liability  to  compensate  the  workman  is  thrown  upon 
employers,  collectively  in  groups,  according  to  the  hazard  of  the  industry. 
Employers  are  encouraged  or  compelled  to  combine  in  associations  for  the  purpose 
of  insuring  their  workmen  against  accidents  and  providing  the  funds  for  the 
purpose.  The  injured  workman  looks  for  his  compensation,  not  to  the  individual 
employer,  but  to  the  association  or  the  fund.  The  principle  of  collective  liability 
is  illustrated  in  the  German  system  under  which  employers  are  grouped  by  indus- 
tries under  State  compulsion  and  supervision,  and  are  required  to  provide  funds 
for  compensation  or  relief  for  injuries  arising  in  their  respective  groups.  The 
collective  liability  system  has  been  adopted  by  a  majority  of  the  countries  of  Europe 
and  some  of  the  States  of  the  American  Union,  but  the  German  system  being  the 
oldest  and  the  most  scientifically  developed  is  usually  cited  as  the  type. 

State  Insurance. — Under  this  method  the  State  itself  assumes  the  obligation 
to  pay  compensation,  the  cost  being  levied  upon  employers  or  employers  and 
workmen,  through  the  agency  of  a  State  Insurance  Department.  The  workman 
looks  for  his  compensation  directly  to  the  State  Department  and  the  compensation 

rovided  out  of  a  fund  levied  in  the  form  of  insurance  premiums  upon  the  pay- 
roll of  industries.  This  method  is  illustrated  in  the  acts  recently  adopted  by  the 
States  of  Washington  and  Ohio." 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  287 

The  Commissioner  :  Is  that  so  in  the  case  of  Ohio  ?  It  is  very  different  from 
the  Washington  Act. 

Mr.  Wegenast:  The  difference  arises  out  of  a  different  view  of  the  consti- 
tutional problem.  It  is  in  the  form  of  being  elective,  but  is  in  effect  compulsive. 
The  elective  feature  is  intended  to  get  around  the  difficulty  which  the  American 
States  all  face,  that  they  are  not  allowed  by  the  Constitution  to  deprive  any  man 
of  property  or  liberty  (I  forget  the  exact  term)  without  due  process  of  law,  and  by 
putting  the  matter  in  the  form  of  an  election,  and  making  it  as  difficult  to  elect 
one  thing  as  possible  and  as  easy  to  elect  the  other  as  possible,  they  escape  the 
constitutional  difficulty.  It  has  been  pointed  out  to  me,  however,  by  Mr.  Preston, 
who  drafted  the  Washington  Act,  that  the  Act  of  the  State  of  Washington,  and  per- 
haps the  same  remark  would  apply  to  the  State  of  Ohio,  that  it  is  rather  a 
collective  liability  system  under  State  administration.  Mr.  Preston  points  out 
that  while  the  State  does  administer  the  compensation  system  through  the  State 
Department  it  does  not  guarantee  anything.  It  does  not  guarantee  solvency,  and 
is  in  fact  prevented  by  the  Constitution  of  the  State  from  doing  so.  Mr.  Preston 
stated  to  me  that  his  original  idea  was  to  have  the  State  guarantee  the  compensa- 
tion, but  on  account  of  the  constitutional  doubt  he  eliminated  that  feature. 

The  Commissioner:  Does  he  not  whip  the  devil  round  the  stump?  Does 
the  State  not  contribute  so  much? 

The  Commissioner:  Simply  towards  the  management  of  the  fund.  There 
is  a  fund  set  apart.  It  is  $150,000  to  start  the  Department,  but  the  system  is 
really  a  collective  system,  and  he  points  out  there  is  nothing  further  to  guarantee 
the  solvency  than  the  size  of  the  classes  created  by  this  act. 

The  Commissioner  :  They  are  not  divided  into  different  classes  in  one  sense ; 
they  pay  in  different  proportions. 

Mr.-  Wegenast  :     Yes,  they  pay  different  rates. 

The  Commissioner:  I  suppose  that  would  be  a  difficulty.  Why  did  they 
not  provide  as  they  do  in  mutual  insurance  companies,  tha,t  if  the  fund  was 
insufficient  to  pay  the  claims  an  assessment  should  be  made  upon  all  the  persons 
according  to  these  rates  ? 

Mr.  Wegenast:  There  is  a  provision  of  that  kind.  It  is  not  put  in  that 
specific  way,  but  there  is  a  provision  under  which  that  could  be  done. 

The  Commissioner:  I  suppose  they  had  to  touch  that  gingerly  because  of 
the  constitutional  question. 

Mr.  Wegenast:  Now,  as  to  the  advantages  and  disadvantages  of  the  three 
systems,  the  individual  liability,  the  collective  liability  and  State  liability,  and  this 
is  only  of  course  a  rough  outline  which  I  have  extended  in  the  brief :  "  The  method 
of  individual  liability  has  been  pronounced  with  singular  unanimity  by  those  who 
have  investigated  the  operation  of  the  different  systems  as  a  failure.  It  involves 
the  violation  of  almost  all  the  twelve  principles  above  laid  down  as  representing 
the  chief  elements  of  a  satisfactory  compensation  system.  The  individual  liability 
systems  have  not  tended  to  any  appreciable  degree  to  reduce  the  number  of  indus- 
trial accidents  or  to  conserve  the  life,  health  and  efficiency  of  the  workman." 

I  would  rather  that  sentence  had  not  so  much  the  appearance  of  an  attempt  at 
rhetorical  effect  that  it  might  better  emphasize  the  fact  intended  to  be  brought 
out,  of  which  there  is  not  the  slightest  question.  "  They  operate  with  peculiar 
hardship  upon  small  employers,  and  older  and  partially  disabled  workmen.  They 
cannot  be  well  operated  so  as  to  secure  periodical  payments  as  opposed  to  lump 
sum  payments  of  compensation." 

The  Commissioner  :     I  don't  quite  understand  what  that   means.     "  They 


288  MINUTES  OF  EVIDENCE:  No.  65 

operate  with  peculiar  hardship  upon  small  employers,  and  older  and  partially  dis- 
abled workmen." 

Mr.  Wegenast  :  That  was  referred  to  by  Mr.  Stewart  here,  and  is  illustrated 
by  the  departmental  reports. 

The  Commissioner:  Under  the  system  you  propose  would  it  not  be  to  the 
interests  of  the  employer  not  to  have  old  men  who  are  more  subject  to  accidents? 

Mr.  Wegenast  :  No ;  it  would  be  to  his  interest,  but  he  would  not  be  allowed 
to  discriminate.  The  humanitarian  element  would  stand  in  the  way  of  any  rule 
being  made  discriminating  against  the  older  and  disabled  workmen. 

The  Commissioner:  You  cannot  compel  a  man  to  take  John  Smith,  60 
years  of  age,  into  his  employment. 

Mr.  Wegenast:  You  cannot  compel  him,  but  he  would  be  under  no  direct 
personal  disadvantage  by  engaging  him. 

The  Commissioner:  Would  you  not  have  a  wholesale  barrier  set  up  by  all 
the  employers? 

Mr.  Wegenast:  No,  the  employers  could  not  justify  themselves  in  face  of 
the  general  community  by  making  a  rule  of  that  kind.  An  employee  can  justify 
himself  in  the  eyes  of  the  general  community  by  making  the  strictest  kind  of 
regulations  with  respect  to  safeguards  and  rules  for  the  prevention  of  accidents. 

The  Commissioner  :  Some  of  them  do  not  care  very  much  about  justifying 
themselves  to  anybody. 

Mr.  Wegenast  :  That  may  be,  hut  that  is  the  point  your  Lordship  is  raising, 
that  they  would  perhaps  discriminate  against  the  older  workmen;  but  they  would 
not  be  justified.  Individually  it  costs  them  so  little  that  there  is  no  particular 
advantage  concerned.  They  would  have'  to  be  justified  in  the  eyes  of  the  general 
community  in  making  rules  discriminating  against  the  employment  of  older  and 
incapacitated  workmen.     I  may  go  into  that  a  little  more  in  detail  later. 

'  They  cannot  be  well  operated  so  as  to  secure  periodical  payments  as  opposed 
to  lump  sum  payments  of  compensation."  The  statistics  of  the  investigating 
committees  of  (the  British  House  of  Commons  bore  that  out  fully,  and  all  the  text- 
book writers  upon  the  subject  support  it. 

The  Commissioner  :  Apparently  you  propose  a  cast-iron  provision,  that  there 
shall  be  no  lump  payments.  I  can  imagine  there  might  be  many  cases  in  which 
it  would  be  most  desirable  that  there  should  be. 

Mr.  Wegenast  :  I  have  stated  ft  almost  in  those  words.  I  have  said  as  a 
general  rule  it  should  not  be  in  a  lump  sum,  but  there  are  many  cases  where  it 
would  doubtless  be  desirable.     I  will  read  the  paragraph  dealing  with  that. 

'*  In  some  cases,  as  for  example  where  an  artificial  limb  or  other  device  is 
required  facilities  for  a  lump  sum  payment  should  be  left  open;  and  these  facilities 
might  be  extended  to  other  cases  where  the  lump  sum  payment  is  found  in  the 
exercise  of  the  wise  discretion  of  some  supervising  body,  to  afford  superior  advan- 
tages to  the  compensation  plan,  but  as  a  general  rule  a  pension  on  the  basis  of  a 
percentage  of  former  wages  is  found  most  satisfactory." 

That  is  supported  by  voluminous  evidence  both  in  England  and  other  countries, 
and  by  the  text  writers. 

Then  I  go  on :  "  They  do  not  afford  any  assurance  that  the  compensation 
payments  will  he  made,  or  continue  to  be  made,  there  being  no  guarantee  of 
solvency  on  the  part  of  those  charged  with  payment.  They  have  been  proven  to  be 
wasteful  in  the  extreme,  a  large  percentage  of  the  money  paid  out  in  contributions 
by  way  of  employers'  liability  insurance  premiums  being  taken  up  by  commissions, 
expenses  of  litigation,  profits,  etc.     The  workman  is  obliged  to  resort  to  legal  or 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  289 

quasi-legal  process  to  enforce  his  claim  against  the  employer.  The  settlement  of 
each  claim  involves  a  direct  contest  'between  workman  and  employer,  the  latter 
being  supported  by  the  employers'  liability  insurance  companies  with  its  superior 
facilities  for  contesting  claims." 

The  Commissioner:  Would  that  not  be  a  great  deal  mitigated  if  the  lia- 
bility of  the  employer  were  extended,  as  you  seem  to  agree  with  those  representing 
the  labour  interests  that  they  should  be  extended?  There  would  not  be  the  same 
occasion  for  dispute. 

Mr.  Wegenast:  That  is  true.  It  does  eliminate  the  expense  of  litigation 
to  some  extent  perhaps  by  simply  stripping  the  employer  of  all  his  defences.  He 
simply  has  to  throw  up  his  hands  and  say  I  can't  do  anything.  Still  the  statistics 
in  England  show  that  there  are  still  a  considerable  number  of  points  upon  which 
litigation  does  arise,  and  in  any  event  there  is  the  inevitable  contest  over  the  amount 
of  the  claims,  and  other  features  of  compensation,  the  contest  being  directly 
between  the  employer  and  the  employee,  with  the  employer  supported  by  the 
liability  insurance  company. 

The  Commissioxee  :  If  you  had  a  supplementary  British  Act,  requiring 
compulsory  insurance  by  employers  and  giving  the  workman  the  right,  when  he  was 
injured,  to  subrogate  to  the  rights  of  the  employer  against  the  company,  would 
that  not  protect  him  to  a  considerable  extent? 

Mr.  Wegenast:  Well,  I  would  not  like  to  speak  of  all  the  features  of  that 
offhand. 

The  Commissioner:     Have  you  considered  that  aspect  of  it? 

Mr.  Wegenast:  No,  but  I  would  be  prepared  to  say  this  offhand,  that  it 
would  simply  add  another  factor  in  the  circuity  of  liability  which  must  exist  under 
any  individual  liability  system,  and  would  raise  more  litigation.  I  would  be 
prepared  to  say  that  offhand.  I  have  not  considered  all  the  bearings  of  the  sug- 
gestion. 

The  Commissioner:  What  is  involved  in  my  question  is  this:  A  man  meets 
with  an  accident :  the  employer  is  insured.  Now,  the  British  Act  provides  in  the 
case  of  the  insolvency  of  the  employer  there  is  a  preferred  claim.  Why  shouldn't 
the  employee  when  injured,  if  this  system  were  adopted,  have  a  right  to  say  to  the 
insurance  company,  I  have  a  lien  upon  this  fund,  do  not  pay  it  to  the  employer, 
and  when  he  has  established  his  claim  get  it  instead  of  the  employer  getting  it 
from  the  insurance  company?  However,  I  do  not  ask  you  to  express  any  opinion 
upon  that  offhand. 

Mr.  Wegenast  :  Then  I  continue :  "  The  individual  liability  systems 
represent  the  greatest  and  most  direct  strain  upon  the  industries."  The  meaning 
of  that  is  not  apparent  on  the  face  of  it,  but  I  will  go  into  that  later.  "  They  are 
admitted  by  nearly  all  observers  to  represent  merely  a  stage  in  the  development 
of  a  satisfactory  compensation  system  and  involve  in  the  meantime  unsatisfactory 
relations  between  employers  and  workmen,  and  unsatisfactory  economic  conditions 
to  the  community  at  large. 

"  The  collective  liability  method  as  applied  in  Germany  and  other  countries  of 
Europe,  as  well  as  some  of  the  American  States,  is  generally  regarded  as  a  success 
in  its  practical  working  out.  The  systems  of  these  jurisdictions  are  found  to 
embody  in  a  large  measure  the  elements  above  outlined  as  constituting  a  satisfactory 
compensation  system.  The  type  system,  that  of  Germany,  is  the  outstanding 
example  of  a  successful  solution  of  the  problem;  and  the  criticisms  upon  it  are 
attributable  solely  to  defects  in  the  details  and  administration  of  the  svstem." 
19  L. 


290 


MINUTES  OF  EVIDENCE:  No.  65 


The  Commissioner:     Does  that  mean  you  are  expressing  the  view  that  this 
•man  system  might  be  transplanted  here   and  survive,  under  our  conditions? 
Me.  Wegex.ast:     Not  in  its  present  form  in  Germany,  but  the  same  principle 
might  be  adopted  to  the  conditions  here. 

Tin:  (  ommissioner  :  We  have  no  such  thing  as  these  trade  organizations  as 
an  instrument  of  working  it  out. 

Me.  Wegenast:  At  a  later  stage  I  propose  to  indicate  the  opinion  of  the 
committee,  and  what  I  believe  is  the  general  opinion  of  the  business  employing 
interests  of  the  Province,  that  there  is  a  way  of  working  out  a  system  on  the 
German  principles.  The  Washington  Act  in  one  sense  is  an  embodiment  of  the 
German  principles,  and  the  practicability  of  adopting  it  has  been  a  matter  of 
very  grave  consideration  amongst  the  members  of  our  Association.  We  sent 
out  circulars  to  all  the  members,  and  the  answers  to  these  circulars  'showed 
a  remarkable  body  of  opinion  in  favour  of  something  in  the  nature  of  the  German 
system,  the  Washington  system,  or  at  any  rate  of  the  system  of  government 
administration. 

"The  State  insurance  system  as  applied  in  the  State  of  Washington  and  other 
States,  as  well  as  a  number  of  other  European'  countries,  has  the  approval  of  a 
large  majority  of  investigators  and  writers  upon  the  subject.  Constitutional  and 
other  practical  difficulties  have  interfered  with  the  introduction  of  such  a  system 
in  many  jurisdictions  where  it  was  otherwise  regarded  as  desirable.  The  exper- 
ience of  those  jurisdictions  which  have  adopted  the  system  has  called  forth 
enthusiastic  commendation  from  employers  and  workmen  as  well  as  the  general 
public,  and  has  given  every  reason  to  believe  that  such  a  system  affords  a  satisfactory 
solution  of  the  problem." 

I  propose  to  add  to  your  Lordship's  brief  copies  of  letters  and  expressions 
of  opinion  from  various  interests  in  the  State  of  Washington,  and  in  the  adjacent 
Province  of  British  Columbia,  upon  the  working  of  the  Washington  Act. 

The  Commissioner:     Is  it  not  somewhat  early  to  prophesy  in  that  regard? 
Mr.  Wegenast  :     It   is   somewhat   early,  but  the   remarkable  unanimity   of 
employers  and  employees  does  indicate  something,  whatever  it  may  be.     Experience 
will,  no  doubt,  expose  defects  and  disadvantages  that  do  not  now  appear. 

The  Commissioner:  Have  you  learned  how  the  payments  for  the  initial 
contributions  were  made? 

Me.  Wegenast:  I  had  a  letter  just  the  other  day  from  Mr.  Higday,  the 
active  commissioner,  and  it  might  not  be  out  of  place  to  refer  to  an  incident  that 
is  rather  interest  in, g  in  this  connection.  I  had  some  correspondence  with  the 
airman  of  the  Michigan  commission,  which  is  reporting  now  in  favour  of  an 
similar  to  the  Ad  of  Massachusetts,  which  is  by  the  way  as  close  a  replica 
of  the  German  system  as  is  thought  possible  in  that  State.  Mr.  Smith,  the  Chair- 
mar  of  the  Michigan  Commission,  called  my  attention  to  the  fact  that  one  of  their 
commissioners  had  gone  to  the  State  of  Washington  and  had  found  there  what  he 
called  a  lamentable  state  of  affairs,  and  referred  particularly  to  a  large  accident 
which  bad  happened  there  just  a  few  days  before  I  was  in  Seattle,  in  some  powder 
works,  in  which  there  were  claims  involving  many  thousands  of  dollars,  and 
referred  to  the  fad  that  there  was  only  $270  in  the  treasury.  I  quoted  Mr. 
Smith's  commenl  in  a  letter  to  Mr.  Eigday,  the  Commissioner  of  the  State  of 
Washington,  and  he  immediately  sent  a  letter  to  the  Governor  of  the  State  of 
Michigan  repudiating  the  statemenl  and  giving  the  real  facts.  I  have  a  copy 
i  f  M  here.  I  do  not  know  thai  it  is  prudent  now  to  put  this  in,  but  I  thought 
I   miffhl   mention   it. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  291 

"The  greatest  difficulty  in  the  way  of  an  introduction  of  an  act  like  that  of 
the  State  of  Washington  is  the  immediate  additional  expense  to  the  employer 
represented  by  a  probable  rise  of  from  100  to  1,000  per  cent,  over  the  cost  under 
existing  conditions." 

I  have  already  referred  to  the  probable  rise,  and  Mr.  Neely  stated  to  us  the 
other  night  that  it  was  not  improbable  that    the  rate  would  be  quadrupled. 

"Most  large  employers  cover  their  risk  under  the  present  laws  by  employers 
liability  insurance.  While  the  rates  for  this  insurance  are  very  high  relatively 
to  the  benefits  conferred  by  it  upon  injured  employees  the  introduction  of  a  system 
like  that  of  Washington  would  involve  a  considerable  disturbance  of  economic  con- 
ditions to  the  prejudice  of  both  employers  and  workmen.  The  same  result  would 
of  course  follow  the  introduction  of  an  individual  liability  system  such  as  that 
of  England,  in  which  latter  case  the  expense  of  conferring  corresponding  benefits 
would  be  much  larger  owing  to  the  large  percentage  of  waste. 

That  is,  if  we  wanted  to  introduce  an  act  along  the  lines  of  the  British  Act, 
with  benefits  corresponding  to  the  Washington  Act,  the  rates  would  be  practically 
twice  as  high. 

"There  is  a  plan  under  which  a  collective  or  State  insurance  system  could 
be  established  at  an  immediate  annual  cost  not  greater  than.,  and  in  fact  in  many 
industries  considerably  less  than,  that  of  the  present  liability  insurance  rates- 
This  plan  may  be  called  the  current  cost  plan."  The  emphasis  there  is  on  the 
word  "immediate."  "Under  it  instead  of  capitalizing  the  periodical  payments 
due  to  the  injured  workman  or  his  dependants  and  setting  aside  at  the  time  of  the 
accident  a  lump  sum  to  provide  for  all  future  payments,  only  the  current  cost 
of  meeting  the  annual  payments  would  be  assessed  each  "year  with  a  small  margin 
for  an  emergency  reserve  fund.  The  annual  assessment  should  increase  as  the 
number  of  dependants  increased,  and  the  annual  rate  would  only  reach  its  maxi- 
mum after  a  period  of  twenty- five  or  thirty  years."  This  was  the  actuarial  plan 
adopted  in  Germany.  It  represents  a  minimum  strain  upon  present  industry  and 
does  not  involve  the  shock  to  the  economic  system  which  would  be  incidental  to 
the  adoption  of  an  extensive  scheme  of  immediate  capitalization." 

That  is  a  feature  that  we  have  considered  very  seriously. 

The  Commissioner:  That  would  involve  this,  no  doubt,  the  man  who  would 
drop  out  of  business  would  escape,  and  the  burden  would  fall  upon  those  who 
sacceeded  him- 

Mr.  Wegenast:     Yes. 

The  Commissioner:     That,  of  course,  you  recognize. 

Mr-  Wegenast:     Yes,  I  recognize  that. 

The  Commissioner:     Was  that  not  an  objection? 

Mr.  Wegenast:  It  was  thought  a  slight  objection,  but  it  does  not  weigh 
at  all  against  the  advantages  of  the  system.  I  am  prepared  to  meet  some  initial 
scepticism  on  the  advantages  of  that  system. 

The  Commissioner:  What  you  are  practically  doing  is  to  assimilate  it  to 
a  mutual  life  insurance  system? 

Mb.  Wegenast:  To  an  assessment  life  insurance,  but  the  objections  that 
strike  one  at  first  are  not  the  objections  which  exist  in  the  assessment  life  plan. 
In  the  first  place  the  rate  would  never  rise  above  the  normal  rate.  If  the  rate 
reaches  the  normal  figure  at  the  end  of  thirty  years  it  ought  never  to  rise  above  it, 
because  the  rate  then  of  those  coming  on  the  fund  will  be  off-set  by  those  dying 
off,  and  the  normal  rate  will  then  go  on  just  as  if  the  normal  rate  had  started 
from  the  beginning-     There  is  one  feature  of  the  system  which  is  more  important 


MINUTES  OF  EVIDENCE:  No.  65 


even  than  the  most  economic  feature,  and  that  is  brought  out  by  Mr.  Dawson,  the 
w  York  actuary,  who  I  hope  to  have  here  before  your  Lordship  on  Tuesday  even- 
next.     In  his  brief  and  in  his  address  to  the  Federal  Commission  of  the  United 
States  he  showed  by  statistics  that  are  of  course  incontrovertible^ 

The  Commissioner:     All  statistics  are,  no  matter  where  they  come  from. 

Mr.  YVegexast:  That  is  a  characteristic  statistics  have.  They  are  incon- 
trovertible to  me  at  all  events,  that  the  result  of  the  current  cost  plan  of  insurance 
was  an  immense  impetus  to  activity  in  the  direction  of  accident  prevention.  He 
showed  that  in  a  number  of  industries  in  Germany,  in  fact  in  most  industries,  the 
normal  rate  had  been  reached  after  a  period  of  about  fifteen  years,  instead  of 
taking  as  it  should  according  to  the  actuarial  tables  thirty  years  or  more,  and  the 
reason  was  this,  the  rapid  rise  in  the  rates  for  the  first  few  years  empha- 
sized and  kept  constantly  rubbing  it  in,  as  it  were,  upon  the  employer, 
the  necessity  of  accident  prevention.  It  is  quite  easy  to  see  when  one 
comes  to  think  of  it  how  that  would  be  so  in  the  number  of  industries  spoken 
of  by  Mr.  Dawson,  and  the  same  remark  applied  I  believe  universally  in  Germany, 
that  the  normal  compensation  rate  was  reached  in  twelve  or  fifteen  years.  I 
would  like  to  refer  to  a  passage  from  Mr.  Dawson's  remarks  at  this  stage.  He  says, 
"Id  the  course  of  my  work  for  the  Bureau  of  Labour  last  year" — and  he  is  one  of  the 
active  members  of  the  United  States  Bureau  of  Labour — "I  went  abroad  to  ascertain 
what  workmen's  compensation  is  costing  in  the  various  countries — that  is,  the 
rates  of  premium  which  are  paid  in  the  various  industries — information  which  has 
never  been  collected  before,  in  many  cases  not  even  in  their  own  countries.  I 
also  employed  one  of  the  very  best  men  in  the  actuarial  profession  in  Germany  on 
this  subject  to  make  this  investigation  for  me  as  regards  Germany.  I  think  I  am 
the  only  person,  outside  of  the  Bureau  of  Labour,  because  we  have  not  published 
it,  that  possesses  knowledge  of  what  those  durations  have  proved  to  be  in  Germany. 

Then  he  goes  on  to  speak  of  the  particular  industries  at  page  76.  He 
states,  "They  found  it  in  Germany  tremendously  effectual,  keeping  the  rate  from 
increasing  for  fifteen  years  past,  for  a  long  time  actually  reducing  it,  notwith- 
standing the  increasing  burden  because  of  previous  years'  accidents." 

At  the  bottom  of  page  71  and  on  page  72  he  says,  "The  German  system  is 
what  I  have  described  to  you,  the  rational,  common-sense  system  of  collecting  each 
year  under  a  compulsory  tax  only  that  which  is  necessary  to  meet  the  require- 
ments of  the  year  with  which  to  pay  the  incomes  that  must  be  paid  that  year  on 
account   of  the  accidents  that  happened  that  year  or  previous  thereto,  started   in 

that  way,  we  would   collect  just  enough   the  first  year  to  pay   the   incomes 

required  to  be  paid  on  account  of  the  accidents  of  that  year-     The  German  system 

rted  at  aboul  20  per  cent,  of  its  ultimate  cost.     According  to  the  estimates  of 

will   take  in  the   natural   process  of  events,  if  there  were  no  change 

danger  of  the  industries— if  they  did  not  become  more  dangerous  or 

would    take    fifty   years   before   it    reached   its   absolutelv   full 

and  when    n    reached    that  absolutely  full   figure   it   would   be   the'  same 

average  which   the  insurance  company  would  want  to  charge  from  the  beginning 

Ultl1  ,l"'  3°le  exception   that  you  would  not  have  taken  into  account  the  powerful 

influence  in  favour  of  prevention  which  1  am  about  to  describe." 

Then  the  Chairman  says:  "Do  you  mean  by  that  the  full  cost  would  be  in- 

ed  year  by  year  for  fifty  years?" 

"Mb.  Dawson:  I  do;  hut  practically  it  reallv  reaches  half  its  maximum  in 
ten  to  fifteen  year-,  and  almost  its  maximum  in  twenty-five  years;  and  if  the 
industry  ha. I  learned  its  lesson  and  reduced  the  hazard  it  may  reach  its  maximum 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  393 


in  ten  or  fifteen  years  and  after  that  actually  decline.  Tims  in  Germany  steam 
railways  paid  the  first  year.  1886,  thirty-nine  one-hundredths  of  one  per  cent,  on 
the  pay-roll,  the  nexl  year  seventy-nine  one-hundredths  of  one  per  cent.,  the  third 
1.25,  the  fourth  1.38,  rising  to  1.80  the  eighth;  then  prevention  began  to  affect 
it  markedly  and  it  declined  in  a  few  years,  notwithstanding  the  burden  because 
of  accidents  in  previous  years,  to  as  low  as  1.26,  and  shows  no  signs  after  twenty- 
four  years  of  rising  beyond  about  1.80  per  cent,  which  it  reached  in  eight  years." 
Then  he  speaks  of  the  beer  bottling  industry  and  the  agricultural  industry, 
and  goes  into  the  question  at  some  length  on  pages  72  and  73. 

The  Commissioner:  Why  does  he  assume  that  is  due  to  prevention?  Is 
that  not  a  plain  assumption? 

Me.  Wegenast  :  Well,  I  would  think  not,  but  I  would  prefer  not  to  speak 
from  assumption  myself.  Mr.  Dawson  will  he  here  on  Tuesday  night,  and  I  would 
he  very  glad  to  hear  him  go  into  that-  It  strikes  me  as  generally  reasonable  that 
that  would  have  an  effect. 

The  Commissioner:  It  may  be  so,  but  why  does  he  assume  it?  May  there 
not  be  other  causes? 

Mtc.  Wegenast-:  He  says  he  has  statistics  which  have  never  been  gathered 
before. 

The  Commissioner:     That  would  be  only  to  show  the  number  of  accidents. 

Mr.  Wegenast:  He  is  speaking  at  large.  His  brief  is  in  a  subsequent 
part  of  the    report  and  I  will  refer  to  it  later- 

Xow,  the  last  page  of  the  sketch  or  outline  gives  the  recommendation  of 
our   Association. 

"We  recommend  the  establishment  of  either  a  collective  liability  or  a  State 
insurance  system.  An  individual  liability  system  will  not  be  acceptable  to  the 
manufacturing  interests  of  the  Province." 

If  there  is  any  one  sentence  that  is  the  crux  of  the  whole  brief  that  is  the 
sentence. 

"We  are  prepared  to  lend  every  assistance  to  the  organizations  of  an  inde- 
pendent collective  system,  but  we  believe  that  under  all  the  circumstances  the 
most  economical  and  satisfactory  plan  for  the  Province  of  Ontario  is  a  collective 
system  under  provincial  administration  and  control." 

I  may  say  we  considered  long  and  seriously,  and  in  fact  the  policy  of  the 
Association  was,  as  expressed  in  the  Annual  Eeport  of  1010,  the  project  of  forming 
a  mutual  insurance  company  amongst  the  members  of  the  Manufacturers'  Associa- 
tion along  the  lines  of  the  Mutual  Insurance  Company  now  forming  in  the  State 
of  Massachusetts,  and  forming  under  the  acts  of  some  of  the  other  States  in  the 
United  States.  The  difficulties  of  that  plan  are  apparent-  The  first  difficulty,  of 
course,  would  be  to  get  the  different  employees  to  join,  and  there  would  be  no  way 
of  compelling  them  to  join  the  Mutual  Association,  and  those  who  remained  out 
would  remain  outside  the  benefits.  I  was  rather  startled  to  find  that  the  represent- 
atives of  the  industries  which  have  been  most  progressive  in  adopting  preventive 
measures  are  quite  willing  to  forego  the  advantage  which  their  individual  concern 
would  derive  from  their  superior  preventive  facilities  for  the  sake  of  bringing  into 
line  their  weaker  competitors  who,  after  all  are  competing  with  them  in  the  general 
market.  Thus,  for  instance,  a  prominent  firm  of  manufacturers  of  agricultural 
implements  in  Hamilton  are  known  not  only  throughout  Canada  but  the  United 
States  for  the  excellence  of  their  preventive  facilities  and  the  low  rate  at  which 
they  carry  their  compensation,  and  the  representative  of  that  concern  was  quite 
willing  to  pay  the  higher  rate  and  to  join  in  a  system  in  which  all  other  manu- 


294  MINUTES  OF  EVIDENCE:  No.  65 


facturers  of  agricultural  implements  were  included  and  pay  the  higher  rate. 

"•  We  recommend  the  creation  of  an  independent  non-political  provincial 
insurance  department  administered  by  a  Board  of  three  Commissioners.  This 
Board  should  provide  for  the  payment  of  all  claims  for  compensation  out  of  a  fund 
to  be  raised  by  premiums  levied  upon  the  pay-roll  of  industries  classified  according 
to  hazard." 

The  Commissioner:  Is  that  not  a  little  contradictory  of  one  of  your  prin- 
ciples?    That  leaves  out  the  workmen's  contribution. 

Mr.  Wegenast:     That  is  dealt  with  later. 

The  Commissioner:  You  by  accident  struck  the  truth?  You  provide  for 
all  claims  out  of  a  fund  to  be  raised  by  premiums  levied  upon  the  pay-roll? 

Mr.  Wegenast:     Yes,  classified  according  to  the  hazard. 

The  Commissioner:     Does  that  not  contradict  your  other  proposition? 

Mr.  Wegenast:    No. 

The  Commissioner:  There  would  be  no  room  for  the  workmen's  contribu- 
tion, would  there? 

Me.  Wegenast  :  The  Ohio  Act  makes  provision  for  that.  I  do  not  see  any 
contradiction.     I  am  quite  willing  to  go  into  that  later. 

"  The  Board  should  be  vested  with  full  jurisdiction  to  adjust  all  claims  for 
compensation  upon  sworn  reports  of  the  different  parties  interested.  It  should 
have  power  to  take  evidence,  to  make  independent  investigations,  and  to  re-hear 
and  re-adjust,  its  decisions  being  final  upon  questions  of  fact  and  subject  to  appeal 
only  in  questions  of  law." 

The  sole  object,  of  course,  in  that  is  to  have  the  adjudication  as  prompt  and 
inexpensive  as  possible.  If  it  is  necessary  ot  have  further  appellate  courts  in  the 
interests  of  justice  there  would  be  no  objection,  but  where  the  matter  of  adjust- 
ment is  merely  a  matter  of  establishing  a  claim  to  a  fund  there  should  be  no  more 
difficulty  in  making  it  out  than  there  is  at  present  in  adjusting  a  loss  by  fire. 
There  is  an  occasional  action  in  the  courts,  but  usually  the  action  is  not  over  the 
adjustment  of  the  claim  but  over  legal  questions  arising  out  of  the  contract  of 


insurance." 


'  The  Board  should  also  have  power  to  enforce  preventive  regulations,  and  pro- 
vision should  be  made  for  the  advisory  co-operation  of  representatives  of  different 
classes  of  industries  in  the  framing  of  such  regulations." 

The  Commissioner:     I  suppose  that  means  employers  and  workmen. 

Mi;.  Wegenast:  That  would  depend  perhaps  upon  the  question  of  contribu- 
tion. 

'I'm:  Commissioner:  I  should  think  they  were  pretty  largely  interested  in 
advising  as  to  preventive  measures. 

Mit.  Wegenast:     Quite  so. 

The  Commissioner:     Was  that  intended  simply  to  apply  to  the  employer? 

Mi:.  \\  egenast:  Well,  that,  as  I  say,  would  depend  to  a  considerable  extent 
upon  the  <|iiestion  of  contribution. 

The  Commissioner:  Why  should  that  make  any  difference?  Why  should 
a  man  not  have  a  voice  in  recommending  something  to  be  done  to  safeguard  him 
Prom  accidenl  ? 

Mr.  Wegenast:  That,  of  course,  is  entirely  right,  but  take  as  an  illustration 
the  system  of  Germany,  where  the  funds  for  the  compensation  are  managed  entirely 
h.v  the  employers'  associations,  li  is  only  when  it  comes  to  the  point  of  litigation 
that   the  representatives  of  the  employees  come  in. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  295 

The  Commissioner:  1  think  you  are  misunderstanding  me.  This  para- 
graph is  dealing  with  the  power  of  the  Board  to  direct  preventive  measures  being 
taken.     I  suppose  it  means  for  the  prevention  of  accidents? 

Mi;.  Wegenast:     Yes. 

The  Commissioner  :  It  says  "  provision  should  be  made  for  advisory  co-op- 
eration  in  the  framing  of  the  regulations."  Now,  why  should  the  artisans  not 
have  a  voice  in  that  as  well  as  the  employer,  whether  he  contributes  or  not? 

Me.  Wegenast:  It  is  a  matter  of  practical  working  out.  It  is  not  so  much 
a  principle  as  the  practical  working  out. 

The  Commissioner:     It  is  only  advisory. 

Mi;.  Wegenast:  There  is  no  reason  in  the  world  why  the  labour  unions  even 
should  not  make  representations  to  the  Board,  and  have  a  large  share  in  it. 

The  Commissioner:     How  will  this  and  the  Factory  Act  stand  together? 

Mr.  Wegenast  :  Well,  my  own  idea  has  been  that  it  is  probable  there  would 
be  an  ultimate  merging  of  some  of  the  functions  of  the  factory  inspection  system 
in  the  compensation  system,  so  that  the  inspection  would  be  impelled  from  within, 
and  would  be  conducted  with  a  view  to  the  reduction  of  the  accident  rate  and  the 
rate  of  the  insurance  premium,  thus  affording  the  advantages  of  voluntary  action 
as  against  compulsion  from  without.  But  that,  I  thought,  was  a  matter  for  sub- 
sequent consideration  and  a  matter  of  detail. 

The  Commissioner  :  I  should  think  a  Board  such  as  you  suggest  for  the 
management  and  settlement  of  these  claims  would  not  be  the  Board  best  qualified 
to  deal  with  the  preventive  measures  in  a  factory. 

Mr.  Wegenast:  Well,  the  practical  way  of  looking  at  it  comes  down  to  that. 
What  I  thought  would  happen  is  this:  Supposing  you  went  even  only  to  the 
extent  of  the  Washington  Act,  and  created  only  certain  classes,  there  would  be 
means  found  inevitably  for  getting  the  employers  in  those  classes  together  to  take 
united  action.  The  Act  might  well  afford  facilities  for  doing  that;  but  whether 
the  Act  did  or  not  these  employers  would  get  together  and  frame  preventive  regula- 
tions and  make  their  wishes  felt  in  the  department  in  charge  of  the  insurance. 
For  instance,  supposing  the  manufacturers  of  agricultural  implements  thought  an 
expert  draftsman  of  machinery  would  reduce  their  insurance  rate,  I  have  no  doubt 
they  would  get  together  in  some  way  and  employ  such  a  man  at  their  own  expense. 
I  think  the  act  might  well  afford  facilities  for  appointing  such  a  man  at  the  expense 
of  the  employers,  or  the  employers  and  employees  jointly,  or  whatever  the  method 
might  be,  with  the  consent  of  the  Board.  But  with  regard  to  the  general  principle 
1  think  there  can  be  no  doubt.  I  think  it  would  work  out  in  that  way  voluntarily 
if  facilities  were  not  afforded  by  the  act. 

Mr.  Bancroft  :  I  think  in  the  mutual  associations  in  Germany  the  employ- 
ers do  that. 

Mr.  Wegenast:     Yes,  the  employers  do  that. 

The  Commissioner:  That  is  all  right.  I  was  talking  about  State  in- 
spection.    It  would  not  do  to  abandon  the  State  inspection. 

Mr.  Wegenast:  I  think  not;  at  all  events  not  at  present.  I  would  think 
it  very  probable,  however,  that  ultimately  that  the  factory  inspection  end  that  is 
now  handled  by  the  department  here  would  be  obsolete. 

The  Commissioner  :  You  must  be  one  of  these  men  who  are  looking  for  the 
millennium  very  soon. 

Mr.  Wegenast:  Whether  I  am  or  not,  the  committee  with  whom  I  have 
been  associated,  I  think,  would  probably  resent  such  an  implication.  With  us  it 
is  a  matter  of  business,  and  is  looked  at  very  largely  from  a  business  standpoint. 


296 


MINUTES  OF  EVIDENCE:  No.  65 


"  The  Board  should  also  have  charge  of  the  adjustment  of  insurance  rates  and 
the  classification  of  industries." 

Many  questions  might  be  raised  there,  but  they  are  questions  of  detail  winch 
would  be  subject  to  adjustment  and  working  out. 

■  The  annual  assessments  of  insurance  premiums  should  be  levied  upon  the 
basis  of  the  current  cost  of  compensation  payments  with  a  margin  for  an  emer- 
gency fund."  5j 

The  Commissioner  :     What  does  that  mean,  "Current  cost  of  payments   ? 

Mr.  YYecexast:  Paying  only  what  is  required  for  the  particular  year  under 
the  plan  that  was  adopted  by  Germany,  and  the  plan  which  is  expounded  by  Mr. 

Dawson. 

"  A  percentage  of  the  premium  rates  representing  the  proportion  of  the  acci- 
dents due  to  the  fault  of  the  workman  should  be  chargeable  at  the  option  of  the 
employers,  and,  upon  due  notice  to  the  workmen,  and  deducted  by  employers  from 
the  wages  of  the  workmen." 

The  Commissioner:  I  do  not  understand  that.  You  have  nowhere  sug- 
gested that  the  workman  should  pay  for  an  accident  that  he  causes.  You  have  said 
he  should  be  disentitled  to  recover. 

Mr.  Wegenast:     No.     If  I  have  seemed  to  say  that  I  did  not  intend  it  so. 

The  Commissioner  :  Do  you  mean  to  say  the  idea  is  if  the  workman  through 
these  causes  that  are  mentioned  in  the  earlier  part  injures  the  machinery,  or  injures 
another  workman,  that  he  has  to  pay  for  that? 

Mr.  Wegenast:  Oh,  no,  the  idea  is  that  the  workmen  collectively  shall  con- 
tribute a  portion  of  the  insurance  premium.  Possibly  the  Ohio  Act  will  illustrate 
it,  where  ten  per  cent,  of  the  amount  of  the  insurance  premium  paid  on  behalf  of 
the  workman  may  be  deducted  from  the  wages  of  the  workman. 

The  Commissioner:     Ten  per  cent,  of  what? 

Mr.  Wegenast:  Ten  per  cent,  of  the  insurance  premium  paid  on  behalf  of 
the  workmen.  Under  the  Austrian  Act  ten  per  cent,  is  deducted.  Under  the 
Swiss  Act  25  per  cent,  is  deducted.  The  whole  question  of  contribution  by  the 
workmen,  is,  as  I  have  stated  before,  largely  a  matter  of  detail.  In  one  sense  it 
is  a  matter  of  principle,  and  so  far  as  the  Manufacturers'  Association  are  concerned 
they  are  prepared  to  lay  their  arguments  and  their  principles  before  not  only  your 
Lordship,  but  before  the  labour  people,  and  leave  the  issue.  On  the  general  principle 
we  could  not  conscientiously  give  way.  There  are  different  methods,  of  course,  of 
contributing.     The  method  under  the  German  Act  is  a  waiting  period  of  thirteen 

WCei 

Mr.  Bancroft:  Do  the  workmen  contribute  to  workmen's  compensation  in 
Germai 

Mi;.  Wegenast:  The  system  of  having  the  burden  of  the  accidents  thrown 
upon  the  employees  themselves  for  thirteen  weeks  is  estimated  to  throw  approxi- 
mately 17  per  cent,  of  the  total  cost  of  accidents  upon  the  workmen. 

.Mi;.  I'.axoroft:  That  was  only  due  to  the  social  insurance  being  in  existence 
before  the  compensation. 

Mi;.  Wegenast:     I  am  not  speaking  of  the  cause  of  it. 

Mb.  Bancroft:  The  mutual  associations  of  Germany  have  full  administra- 
tion of  workmen's  compensation  just  as  you  point  out  here,  and  they  take  their  own 
measures  for  the  enforcement  of  preventing  accidents  because  they  bear  the  whole 
cost,  and  wherever  the  workmen  contribute  to  either  sickness  or  social  insurance, 
or  anything  else,  they  have  the  full  representation  they  are  entitled  to.     They  have 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  297 

representation  by  taxation  on  the  administrative  Boards  of  the  social  insurance  of 
Germany.  Now,  another  thing,  Mr.  Wegenast,  there  is  not  an  act  in  the  British 
Empire  either  in  existence  or  proposed,  where  there  is  contribution  from  the  work- 
men.    It  is  retroactive. 

Mr.  Wegenast:  I  can  tell  you  three  or  four,  but  I  do  not  want  to  enter  into 
a  discussion  of  that  at  present,  because  we  will  get  involved  pretty  well  if  we  do  so. 
We  arc  willing  to  lay  our  arguments  before  your  Lordship,  and  before  the  labour 
people. 

The  Commissioner  :  Mr.  Dawson's  argument  that  you  have  just  referred  to 
would  displace  one  of  the  arguments  in  favour  of  making  the  workmen  pay  a  portion 
of  the  cost.  It  was  said  if  he  had  to  pay  that  he  would  be  more  careful  and  there 
would  not  be  so  many  accidents.  He  does  not  recognize  that  at  all,  the  carelessness 
of  the  workman. 

Mr.  Wegenast  :     Of  course,  there  are  other  factors  entering  into  that. 

The  Commissioner  :     My  understanding  is  he  does  not  recognize  that. 

Mr.  AVegenast:  I  could  quote  quite  a  number  of  expressions  of  opinion  from 
the  leading  authorities  in  Germany  that  the  fact  that  the  workman  bears  the  burden 
for  the  first  thirteen  weeks  in  Germany  does  tend  to  reduce  the  number  of  accidents, 
and  does  tend  to  induce  care,  and  particularly  tends  to  reduce  malingering  and 
fraud.     However,  those  are  matters  that  I  intend  to  go  into  later. 

Mr.  Bancroft:  Mr.  Dawson  says  that  the  whole  burden  of  compensation  in 
Germany  is  upon  the  employer  himself. 

Mr.  Wegenast  :  If  Mr.  Dawson  said  that  it  would  be  wrong,  and  it  would  not 
alter  the  fact. 

The  Commissioner  :  I  think  there  is  a  distinction  without  a  difference  there. 
You  are  not  saying  there  is  any  direct  contribution  in  Germany,  but  an  indirect 
contribution  by  reason  of  there  being  no  claim  upon  the  fund  for  the  first  thirteen 
weeks,  and  in  England  there  is  the  same  thing  for  the  first  week,  I  think. 

Mr.  Wegenast  :  Yes.  Let  me  say,  while  we  are  at  that  point,  that  the 
original  intention  of  the  British  Act  was  that  the  workmen  should  contribute  by  a 
waiting  period  of  three  weeks,  and  the  whole  matter  was  placed  upon  that  basis 
expressly  by  Mr.  Chamberlain,  who  introduced  the  act.  He  said  the  self-respect 
of  the  workman  would  stand  in  the  way  otherwise,  if  he  allowed  the  employer  to 
bear  the  whole  burden,  and  that  this  three  weeks'  waiting  period  was  the  contribu- 
tion of  the  workmen.  I  can  hardly  believe  the  figures,  but  it  is  estimated  by  Mr. 
Boyd,  I  think,  that  the  workmen's  taking  care  of  the  accidents  for  the  first  two 
weeks  will  eliminate  41  per  cent,  numerically  of  the  accidents.  Of  course  that  does 
not  eliminate  41  per  cent,  of  the  cost,  but  it  reduces  the  number  of  accidents  41  per 
cent.,  apparently,  as  41  per  cent,  do  not  last  beyond  the  first  two  weeks.  The 
figures,  as  I  say.  look  large  to  me.  However,  Mr.  Boyd  will  be  here  to-morrow. 
At  any  rate  where  there  is  a  waiting  period  the  workman  does  contribute 
undoubtedly. 

Mr.  Bancroft:     In  what  way? 

Mr.  Wegenast:  It  is  surely  not  necessary  to  elaborate  on  that. 

Mr.  Bancroft  :  He  does  not  contribute. 

Mr.  Wegenast:  Another  method  of  contribution,  of  course,  is  by  a  deduc- 
tion or  by  a  reduction  of  the  scale  of  compensation.  In  some  systems  it  is  esti- 
mated that  the  workmen  should  contribute  by  having  the  scale  of  compensation  a 
certain  figure.  For  instance,  instead  of  having  the  scale  of  compensation  60  per 
cent,  of  the  wages  the  schedule  is  reduced  to  50  per  cent.,  and  it  is  considered 


MINUTES  OF  EVIDENCE:  No.  65 


ggg  1U11N  U  J.  JliO    WI     m>\  ±±jA±i±y^-^  .  —  —     — 


;he  workmen  bear  that  ten  per  cent.,  or  that  ten  per  cent,  along  with  the 

other  40  per  cent,  of  his  loss. 

"  A  percentage  of  the  premium  rates  representing  the  proportion  of  the  acci- 
dents due  to  the  fault  of  the  workmen  should  be  chargeable  at  the  option  of 
employers,  and,  upon  due  notice  to  the  workmen,  and  deducted  by  employers  from 
the  wages  of  the  workmen." 

I  regret  exceedingly  from  a  purely  tactical  standpoint,  if  nothing  else,  but 
it  is  necessary  to  insist  upon  that  principle,  because  it  is  the  only  outstanding 
difference  between  the  employing  and  the  labour  interests,  and,  as  I  say  elsewhere 
in  my  brief,  while  there  is  a  difference  of  opinion  amongst  the  authorities,  and 
while  Mr.  Dawson  is  indifferent  as  to  contribution,  neither  for  nor  against,  and 
while  some  of  the  other  authorities  are  indifferent,  and  some  opposed  to  contri- 
bution, there  is  a  large  body  of  opinion  in  favor  of  contribution  and  of  the  gene- 
ral principle.  It  represents  a  constant  source  of  irritation,  no  doubt,  but  that 
very  irritation  may  be  the  means  of  emphasizing  and  impressing  the  necessity 
of  preventive  activity  on  the  part  of  the  workmen  as  well  as  the  employer,  and  I 
doubt  very  much  whether  the  full  attainable  measure  of  preventive  activity  can  be 
got  without  having  a  pecuniary  responsibility  thrown  upon  the  workman. 

The  Commissioner  :  Following  up  your  argument,  if  you  adopted  the  British 
plan,  which  does  not  give  any  compensation  for  the  first  week  in  certain  cases, 
would  you  not  get  the  fund  relieved  more  than  it  would  be  by  the  percentage  you 
are  proposing? 

Mr;.  Wegenast:  Well,  I  had  no  idea  that  an  act  would  be  proposed  which 
did  not  provide  for  a  waiting  period  of  one  or  two  weeks. 

The  Commissioner:  There  has  been  no  suggestion  of  that  yet. 
Mr.  Wegenast:  No,  but  the  consensus  of  opinion  is  that  the  amendment 
of  the  British  Act  reducing  the  period  to  one  week  was  a  mistake,  and  that  two 
weeks  waiting  period  is  necessary  if  for  nothing  else  than  preventing  malingering, 
and  the  wbole  question,  of  "course,  resolves  itself  into  what  length  the  waiting 
period  should  be,  if  you  adopt  that  as  a  means  of  workmen's  contribution. 

'I'm:  Commissioner:.  That  waiting  period  is  only  conditional.     If  the  injury 
continues  for  a  certain  time  it  is  cut  down. 
Mi;.  Bancroft:  Hear,  hear. 

'I'm;  COMMISSIONER :  What  reason  would  there  be  for  waiting  if  a  man  had 
his  hand  or  his  leg  cut  off? 

Mi;.  Wegenast:  If  that  principle  is  adopted,  the  contribution  by  a  waiting 
period,  the  legislators  would  at  once  advance  that  very  idea,  why  should  a  man 
wail  if  he  has  gol  his  hand  cut  off,  forgetting  altogether  that  the  intention  is  to 
throw  a  burdeD  of  the  cost  upon  the  workman  or  allowing  him  to  bear  the  brunt 
of  his  injury. 

Tin:  Commissioner :  No,  that  I  do  not  understand  to  be  the  principle  at  all. 
The  principle  is  to  prevent,  as  you  say,  malingering.  There  may  be  trifling  acci- 
dents that  do  not  seriously  interfere  with  a  man's  getting  back  to  work,  and  if 
he  had  no  incentive  to  idle  he  would  go  back  to  work.  That  is  the  principle  I 
have  heard  advanced  lor  it. 

Mi:.  Wegenast:  Thai  was  not  the  intention  in  the  original  act,  which  it 
rnusl  ho  remembered  was  supposed  to  be  based  upon  the  German  Act.  I  have  the 
quotation  Prom  Mr.  Chamberlain's  speeches  in  Iho  House  of  Parliament,  and  his 
idea  was  thai  ;i  three  weeks'  wailing  period  should  be  there  as  a  preservative  to 
(he  -elf  reaped  of  the  workman.  No  says  if  there  was  no  injury  lasting  more  than 
three  weeks  the  workman  would  he  well  able  to  take  care  of  it  himself. 


1912  WOBKMENS  COMPENSATION   COMMISSION.  299 

I  do  not  want  to  go  into  the  matter  further  this  morning.  I  would  like  to 
call  upon  one  or  two  members  of  the  Association  to  address  the  Commission.  Mr. 
Atwell  Fleming  and  Mr.  Samuel  Harris  are  here. 

The.  Commissioner:  We  will  be  glad  to  hear  them. 

Me.  Wegenast:  I  regret  that  I  am  not  able  to  go  on  this  afternoon.  I  had 
intended  to  have  had  some  of  the  members  here  to  address  the  Commission,  but 
the  Secretary  informed  me  that  the  Commission  would  not  sit  this  afternoon. 

The  Commissioner  :  I  do  not  know  how  he  got  that  impression.  I  intended 
to  go  on  this  afternoon.  To-morrow  the  Commission  will  sit  both  morning  and 
afternoon,  as  well  as  the  evening. 

Mr.  Atwell  Fleming  :  Your  Lordship,  I  hardly  expected  to  be  called  on  to 
say  anything  in  connection  with  this  matter.  Our  case  was  left  almost  entirely  to 
Mr.  Wegenast  to  present  to  you,  and  anything  I  could  say  would  possibly  be  just 
along  the  lines  of  my  own  experience  and  my  own  thought  as  a  small  manufac- 
turer. I  have  always  thought,  your  Lordship,  in  connection  with  this  question 
that  I  would  like  to  have  some  scheme  whereby,  instead  of  paying  money  to  an 
insurance  company  to  protect  me  as  against  my  workmen,  that  I  would  prefer  to 
pay  even  more  money,  and  have  some  scheme  whereby  the  workmen  would  receive 
the  benefit.  A  great  many  men  that  I  have  run  against  in  connection  with  this 
matter  are  of  the  same  opinion.  Now,  it  might  be  asked,  why  do  you  not  pay 
more  money  and  have  it  entirely  for  the  benefit  of  the  workmen.  It  is  simply 
because  we  are  afraid  that  if  we  have  an  accident  in  our  shop  an  action  will  be 
entered  against  us  in  the  courts  and  we  will  have  to  pay  what  we  considered  ex- 
traordinary compensation,  or  as  it  is  usually  expressed,  held  up  for  all  they  can 
possibly  get  out  of  it.  If  some  scheme  could  he  arranged  on  the  lines  of  what  we 
have  suggested  whereby  we  could  pay  even  considerably  more  money  and  that  the 
money  we  do  pay  would  find  its  way  to  the  workmen  without  having  so  much 
deducted  from  it,  I  think  that  would  be  in  the  line  of  what  we  think  would  be 
right.  I  was  particularly  struck  the  other  evening  in  hearing  Mr.  Meredith,  the 
representative  of  the  Grand  Trunk  Kailway  Men's  Organization,  saying  in  a  case 
where  a  party  was  entitled  to  compensation  and  they  had  been  offered,  I  think 
he  stated,  $1,000,  and  lie  had  advised  them  to  take  it,  and  they  had  evidently  re- 
ceived a  great  deal  less  than  the  amount  of  compensation.  That  seemed  to  my 
mind  to  embody  the  idea  which  I  wish  to  convey,  that  while  to-day  a  great  number  of 
employers  are  spending  a  great  deal  of  money  the  workmen  are  not  getting  the 
benefit  out  of  it.  If  we  could  pay  a  fund  whereby,  instead  of  antagonizing 
the  workman  he  would  have  a  call  on  that  fund  and  get  adequate  protection 
through  it,  I  think  that  is  the  thing  that  we  would  prefer.  There  seems  to  be 
an  idea  in  connection  with  this  matter  that  the  employers  wish  to  be  antagonistic 
to  the  workmen.  I  presume  that  is  a  condition  which  has  arisen  through  the 
state  in  which  the  law  is;  but  in  meeting  on  various  committees  in  connection 
with  this  matter,  I  have  been  struck  with  the  wonderful  amount  of  sympathv  that 
there  appears  to  be  in  the  hearts  and  minds  of  the  various  employers  whom  I  have 
met  in  respect  to  workmen  who  are  injured.  I  fear  they  have  been  compelled 
to  assume  an  attitude  towards  the  injured  workman  by  the  condition  of  the  law 
that  they  would  not  assume  as  individuals.  I  mean  by  that  that  I  have  found  in 
discussing  the  matter — and  I  can  assure  you  it  has  been  very,  very  gratifying  to 
me — that  men  whom  I  thought  were  hard-hearted  and  who  would  go  to  almost 
any  length  to  oppose  an  action  for  damages,  were  really  men  who  would  go  to 
almost  any  length  if  they  could  see  that  the  workman  was  compensated.     They 


300  MINUTES  OF  EVIDENCE:  Xo.  65 


have  been  deterred,  however,  and  have  had  to  assume  that  attitude  simply  because 
:heir  insurance  in  employers'  liability  companies.  They  are  compelled  by  the 
employers'  liability  companies  to  leave  the  matter  in  their  hands,  and  very,  very 
often  when  claims  could  be  settled,  and  settled  amicably,  and  where  the  workman 
would  have  received,  perhaps  not  what  might  be  termed  adequate  compensation, 
still  he  would  have  received  generous  compensation,  if  it  had  been  left  to  the  com- 
] i.iuv  that  was  interested.  But  they  have  been  compelled  to  defend  it  through  the 
ion  of  these  employers'  liability  companies,  and  eventually  in  order  to  settle 
the  case,  it  has  cost  not  only  the  company  insuring,  but  the  liability  company, 
probably  double  the  amount  of  money  which  it  could  have  been  settled  for  in  the 
first  place.  That  represents  to  our  minds  a  very,  very  great  waste  of  time  and 
a  very  great  waste  of  money.  If  a  larger  proportion  of  that  cost  could  eventually 
find  its  way  to  the  injured  workman,  that  is  what  we  want,  and  that  I  think  is 
the  gist  of  what  I  want  to  say.  That  is  the  main  idea,  to  have  that  money  which 
it  is  really  costing  to-day,  instead  of  being  diverted  from  the  injured  workman, 
to  get  a  greater  proportion  of  it  to  him. 

Mr.  Wegenast  :  You  do  not  see  any  difficulty  as  a  practical  business  man  in 
the  Government  taking  this  matter  up  and  working  it  out? 

Mk.  Fleming:  Well,  I  am  not  sufficiently  informed  on  this  matter,  but  I 
would  think  that  if  it  is  possible  for  an  insurance  company  to  do  the  amount  of 
business  they  do,  and  handle  the  vast  sums  of  money,  and  the  vast  number  of 
applications,  and  all  that  sort  of  thing,  which  they  do,  that  it  would  be  possible 
for  a  Government  to  institute  a  department  which  would  handle  workmen's  com- 
pensation. As  to  the  cost  of  it,  I  am  not  prepared  to  say  anything  on  that  point, 
but  I  presume  there  is  information  extant  somewhere  that  could  be  got  and  that 
would  be  safe  to  work  on- 

Mk.  S.  Harris  :     Your  Lordship,  I  have  sat  at  this  table  with  Mr.  "Wegenast 
for  some  time,  and  therefore  the  remarks  I  would  make  would  only  be  taking 
up  lime  iii  going  over  the  same  things  which  he  has  said,  and  which  Mr.  Fleming 
has  said.     There  is  one  thing,  however,  I  would  like  to  impress  upon  the  Com- 
mission, that  while  we  are  talking  about  compensation  and  prevention,  and  some- 
thing along  the  lines  of  contribution,  if  we  could  get  education  it  would  go  much 
towards  cutting  out  the  administration  of  compensation,  and   I  believe  that  the 
Government  could  handle  it  much  better  than,  or  any  way  as  well  as,  a  private 
corporation  can  handle  liability  insurance.     There  is  no  question  about  it  that  the 
eminent  is  handling  the  railways  and  the  Hydro-Electric-     It  was  the  Eailway 
Commission  I  was  referring  to  particularly,  but  we  have  also  a  commission  running 
lway  in  the  north  country  very  satisfactorily,  and  I  cannot  understand  why 
In-  Government   could   not  handle  this,  and   by  that  means  the  stability  of  the 
would  bo,  as  near  as  possible,  perfect.     I  want  to  emphasize  what  Mr.  Flem- 
and   say  that  I  have  not  met  an  employer  who  is  not  anxious  to  see 
'he  injured  man  gets  everything  that  is  in  it,  and  everything  that  is  possible 
for  him  to  Lret. 

THE    Commi   3IONER:     There    was   something   that   came   to   my   attention    a 

ihorl    time  ago.     In   a   large   factory  where  there  was  a  stamp  machine,  with  a 

Dumber  of  machines  practically  in  the  same  room  or  the  same  department  of  the 

factory,  the  evidence  was  thai  all  the  employees  were  instructed  how  to  use  these 

and  were  told  that  after  they  had  gone  through  the  operation  of  stamp- 

■  they  Tnu-I  not  on  any  account  keep  their  foot  upon  the  treadle  because  they 

Id  by  involuntary  action  bring  the  thing  down  again.     A  number  of  people  were 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  301 

. 1 

employed  who  were  not  skilled  at  all.  They  are  sometimes  foreigners,  I  should 
judge,  from  what  came  out,  and  these  people  do  not  realize  the  danger  of  dis- 
obeying instructions  they  get,  and  that  very  often  their  feet  are  kept  upon  the 
treadles  contrary  to  instructions,  with  the  result  that  accidents  happen-  Now, 
1  do  not  see  why  in  a  case  of  that  kind  where  the  employer  of  labour  knows  that 
these  people  are  likely  to  disregard  the  instructions,  there  could  not  be  somebody 
moving  about  among  them  all  the  time  to  see  that  the  instructions  are  being 
ohrved.  instead  of  leaving  these  people  to  themselves  without  any  inspection,  and 
without  any  watching  or  care  of  them.  That  is  perhaps  not  germane  to  what  we 
have  been  discussing  this  morning,  but  it  did  seem  to  me  that  a  great  many  of 
these  accidents  could  have  been  prevented  at  practically  a  small  outlay  by  having 
somebody  going  about  superintending  these  foreigners  while  they  are  engaged  in 
those  dangerous  occupations,  because  it  was  dangerous  if  they  failed  to  regard 
the  instructions  they  got. 

Me.  Fleming  :  I  can  easily  conceive  in  a  great  many  factories,  where  men 
are  at  work  with  very  large  machinery,  and  all  that  sort  of  thing,  that  that  might 
be  all  right,  but  in  a  great  many  of  the  smaller  factories  it  wouldn't.  Your 
lordship  used  the  word  "treadle"  when  perhaps  the  word  "trip"  would  be  a 
better  word  to  use. 

The  Commissioner:     Yes,  that  is  the  operation. 

Mr.  Fleming  :  Now,  you  understand  there  is  a  fly-wheel  running,  and  there 
is.  a  very  sensitive  trip  down  ■  below,  and  when  he  wishes  the  machine  to  punch 
he  almost  involuntarily  touches  that  trip  and  down  the  machine  comes,  and  the 
operation  is  performed,  and  the  machine  will  go  on  operating  that  way  just  as 
long  as  he  keeps  his  foot  on  the  trip.  There  are  some  machines  where  they  have 
to  trip  for  every  operation.  That  is,  for  every  punch  that  goes  through  they 
will  use  their  foot  to  trip  it.  Sometimes  they  will  be  talking  and  they  will 
have  their  hands  here  or  there  and  almost  anywhere,  and  while  they  know  abso- 
lutely that  the  slightest  pressure  of  their  foot  on  that  trip  is  going  to  cause  that 
machine  to  make  that  performance,  and  if  their  finger  is  in  the  way  it  is  going 
to  be  cut  off,  still  it  happens.  I  have  had  a  man,  and  even  the  superintendent 
of  the  factory,  who  was  adjusting  a  machine  and  knew  absolutely  that  he  should 
be  very  careful  with  regard  to  that,  who  took  off  the  end  of  his  finger.  The  very 
slightest  touch  of  the  foot  will  do  that-  So  that  an  inspector  walking  up  and 
down  would  not  prevent  these  things.  You  can  easily  understand  how  it  would 
be.  The  moment  his  back  was  turned  it  might  happen,  or  it  might  happen  with 
him  standing  right  there. 

The  Commissioner:  I  was  speaking  of  a  case  where  there  were  thirty  or 
forty  people  standing  in  close  proximity.  The  evidence  in  this  case  was  it 
took  a  pressure  of  35  pounds  to  trip  the  machine.  Would  it  take  anything  like 
that  pressure  with  the  machine  you  were  speaking  of? 

Mr.  Fleming:  No,  the  slightest  touch.  I  was  speaking  of  a  machine  where 
they  cut  out  cardboard,  such  as  index  cards.  There  is  a  knife  comes  down  with 
the  slightest  pressure. 

The  Commissioner  :     Is  there  no  guard  that  would  apply  to  such  a  machine  ? 

Mr.  Fleming:  No,  the  machine  has  to  perform  that  operation  and  you  have 
got  to  put  the  card  in.  The  machine  will  not  come  down  unless  you  touch  the 
trip,  but  the  instant  you  touch  the  trip  down  she  comes,  and  you  haven't  a  second 
to  think,  because  your  finger  is  off  before  you  can  think. 

Mr.  Wegenast  :  The  larger  consideration  that  comes  up  there  is  perhaps 
what  is  in  your  Lordship's  mind.     Something  more  is  needed  than  simply  the  in- 


. 


MINUTES  OF  EVIDENCE:  No.  65 


dividual  effort  of  the  employer  and  the  individual  care  of  the  employee.  It  needs 
to  suggest  and  enforce  preventive  care  that  is  not  enforced  now. 

The  Commissioner:  You  could  not  do  anything  at  all  in  the  case  of  men 
working  with  such  machines  as  I  was  speaking  of,  or  Mr.  Fleming  was  speaking  of, 
unless  it  was  by  close  supervision  of  them  while  they  were  at  their  work. 

Me.  Wegenast:  My  point  is  that  if  it  was  found  under  a  collective  system 
that  accidents  did  happen  with  undue  frequency  in  cases  of  that  kind  the  best 
way  would  be  found,  whether  by  instruction  or  otherwise,  to  stop  it.  but  when 
it   i>  every  man  for  himself  and  he  is  insured  in  a  liability  company  it  is  not 

(111! 

Tin:  Commissioner:  I  fancy  a  very  considerable  percentage  of  the  accidents 
where  fingers  are  lost  occur  in  these  paper  box  factories,  and  tin  factories,  and 
places  of  that  kind,  where  that  kind  of  instrument  is  used. 

Mr.  Fleming:  When  we  met  the  commissioners  from  Quebec,  when  they 
were  trying  to  frame  their  law,  I  was  struck  with  what  one  gentleman  on  that 
commission  said.  According  to  the  statistics" "which  they  had,  which  were  gathered 
from  all  over  the  world,  they  stated  that  there  were  a  certain  percentage  of 
accidents  which  happened  owing  to  the  fault  of  the  employer,  a  certain  percentage 
of  accidents  which  happened  owing  to  the  fault  of  the  employee,  but  the  very  great 
number  of  accidents  which  did  happen  just  simply  happened,  and  they  couldn't 
tell  how  they  happened.  I  may  say  I  very  rarely  have  an  accident  in  my  factory, 
but  they  do  happen.  The  other  day  a  man  who  is  the  superintendent  of  a  depart- 
ment, was  making  a  form  on  a  Gordon  press.  There  is  no  particular  danger 
about  it  unless  a  person  gets  their  hands  caught  in  the  machine,  and  then  of 
course  they  will  get  squeezed  inevitably.  The  superintendent  was  making  ready 
a  form  on  that  press,  and  he  was  actually  moving  the  fly-wheel  with  his  hand- 
The  machine  was  not  operating  with  any  speed  whatever.  He  was  simply  holding 
a  -heel  of  paper  in  there  with  his  hand,  and  he  knew  absolutely  if  he  kept  on 
moving  that  wheel  he  would  squeeze  his  finger  and  yet  he  did  it.  I  said,  "Bert, 
you  must  have  been  thinking  of  something  else."  "No  sir,"  he  said,  "I  wras  think- 
ing of  my  business  and  holding  that  sheet  of  paper."  He  was  so  ashamed  of  it ;  L 
!>pose  he  was  more  humiliated  himself  in  regard  to  the  matter  than  you  could 
possibly  imagine,  and  anything  that  I  could  say  would  not  add  to  his  discomfiture, 
because  he  felt  badly  enough.  Now,  those  things  do  happen,  and  when  the  accident 
happens,  as  it  will  in  connection  with  almost  any  industry,  we  feel  of  course  there 
oughl  to  be  some  provision  whereby  the  man  should  be  compensated.  The  details 
of  course  of  it  will  have  to  be  worked  out- 

Mi:.  Wegenast:     It  has  been  urged  here,  and  I  almost  hesitate  to  raise  the 
po  qo  amount  of  urging  would  establish  the  fact  in  the  mind    of  any 

reasonabli  :i,  but  it  has  been  urged  here  that  practically  no  accident  happens 

owing  to  the  fault  of  the  workmen,  and  there  is  always  something  about  the  hazard 
of  the  industry  or  the  risk  of  the  premises,  or  something  of  that  kind,  which 
is  responsible  for  the  accident.  Now.  in  your  experience,  do  you  know  if  there  are 
accidents  thai   happen  entirely  or  almost  entirely  owing  to  the  fault  of  the  work- 


man ? 


Mi:.    FLEMING:     Will.   I   would  say  in  connection  with  the  accidents  I  have 

;i  I  have  invariably  though!  that  it  was  due  absolutely  to  the  carelessness  of  the 

workman.     To  my   mind    there  was  simply  no  doubt  about  it.     All  of  you  are 

familiar,  of  course,  with  the  ordinary  elevator  in  a  factory.     There  is  an  auto- 

natic  gate   on    thai    elevator   and    just   as  soon   as  the   elevator  starts  from  the 

bottom  the  automatic  gate  comes  down  to  prevent  anybody  walking  into  the  elevator 


1912               YYOKKMK.VS  ClLM  I'LNSATlOX   COMMISSION.                     303 
1 

Well.  Last  October  a  man  that  I  had  employed  with  me  wanted  to  go  upstairs 
on  the  elevator.  The  shipper  and  engineer  were  on  the  elevator,  and  had  started 
the  elevator  just  as  he  ran  to  jump  on.  Now,  all  he  had  to  do  was  to  stand  stock- 
still  and  say  I  want  to  go  up,  and  they  would  have  come  back  for  him,  but  he 
thought  he  was  quick  enough  to  get  in  there  ahead  of  that  gate.  Now,  anyone 
with  any  common-sense  would  not  do  it,  but  he  did  it,  and  the  gate  came  down  and 
hit  him  on  the  nose.  I  might  say,  your  Lordship,  that  it  is  almost  invariably, 
so  far  as  1  have  come  across  employers,  even  though  they  are  insured  in  an 
Employers'  Liability  Company,  and  even  though  they  are  compelled  by  that  com- 
pany to  take  an  attitude  as  against  the  workman,  they  invariably  send  that  man  as 
quickly  as  possible  io  the  doctor,  and  they  pay  the  doctor's  bill,  and  as  a  rule  they 
pay  the  man's  salary  while  he  is  off.  They  are  insured  however.  They  must  have 
that  protection  for  fear  that  that  man  may  be  induced  to  go  to  court  and  say  that 
he  is  injured  to  the  extent  of  $1,000,  or  $2,000,  as  the  case  may  be,  and 
even  in  defending  the  case  they  are  put  to  enormous  expense.  Now,  that  man  was 
sent  immediately  to  a  doctor.  I  really  didn't  think  he  had  any  more  than  the  skin 
knocked  off  his  nose.  No,  he  went  to  the  hospital  first,  and  they  could  not  attend 
to  him,  and  he  went  to  the  doctor.  The  doctor  called  me  up  and  said :  There  has 
been  a  man  injured  in  your  place,  shall  I  attend  to  him?  I  said,  certainly,  fix 
him  up.  The  man  came  back  and  he  had  a  great  lot  of  plaster  and  cotton  batting, 
and  one  thing  and  another  -all  over  him.  I  would  have  thought  he  had  gone 
through  a  threshing  machine  instead  of  having  had  a  bit  of  skin  knocked  off  his 
nose,  as  it  appeared  to  me.  Well,  the  man  left  me  in  three  days  and  didn't  come 
back  again.  Perhaps  it  was  a  little  longer  than  that.  However,  he  was  taken 
away  by  another  employer,  and  the  doctor  sent  me  a  bill  for  $15.  I  thought  it  was 
exorbitant,  and  I  told  him  so,  but  I  sent  him  a  cheque  for  $10.  Well,  the  man 
said  it  was  due  to  his  own  carelessness  and  he  thought  he  ought  to  pay  something 
but  he  never  did,  and  that  was  the  end  of  that.  I  have  said  this  because  you  asked 
me  if  I  thought  it  was  due  to  the  workman's  carelessness  or  not.  Well,  I  have 
seen  quite  a  number  of  accidents  in  my  time,  and  they  were  always  attributable, 
or  at  least  I  thought  so,  to  his  carelessness — absolutely  downright  carelessness, — 
and  if  there  is  anything  that  the  labour  men  can  do  they  should  do  it.  If  they 
would  preach  that  in  their  unions,  that  every  man  should  be  careful,  it  would  be  a 
good  thing.  NTo  employer  wants  a  man  to  risk  his  hand  or  leg  or  foot,  or  any 
part  of  his  anatomy,  in  connection  with  his  business,  and  if  they  will  only  use 
ordinary  horse  sense  and  be  careful  there  is  no  reason  in  the  world  why  they  should 
be  endangered.  That  is,  with  the  general  run  of  modern  machinery  that  we  have 
to-day ;  but  the  fact  that  they  do  get  injured  is  of  course  obvious. 

Mr.  Miller  :  I  would  like  to  say  a  few  words  in  connection  with  the  blame 
that  is  being  attached  to  the  workmen  in  connection  with  those  factory  machines. 
I  have  been  working  since  I  was  a  boy  fourteen  years  of  age.  In  connection  with 
the  illustration  that  Mr.  Fleming  gave  us  I  want  to  point  out  how  it  is  possible 
for  the  most  careful  man  in  a  factory  to  get  hurt  without  taking  part  in  the  actual 
operation.  Those  machines  are  performing  various  operations  at  the  same  moment, 
and  that  superintendent  of  Mr.  Fleming's,  when  he  was  operating  that  machine 
only  by  moving  the  fly-wheel  with  his  hand,  is  an  illustration.  His  thoughts  were 
so  concentrated  on  the  one  portion  of  the  operation  that  he  forgot  his  fingers  were 
actually  in  the  way  of  the  machine's  operation.  Now, — under  those  circumstances, 
giving  the  man  credit  for  being  careful  and  trying  to  do  his  work  at  the  same  time 
in  the  best  possible  manner,  it  is  possible  for  the  most  careful  man  in  a  factory  to 
be  nipped  in  that  way.     I  have  seen  it  time  and  again.     The  man  is  so  careful, 


304 


MINUTES  OF  EVIDENCE:  No.  65 


but  so  concentrated  in  one  portion  of  the  operation  that  he  forgets  entirely  the 
other,  and  it  is  through  his  concentration  on  one  portion  of  the  operation  that  he 
gets  his  lingers  caught. 

Mr.  Harris:     My  hands  show  where  I  have  been  nipped  several  times,  both 
when  I  was  working  as  a  workman  at  the  bench,  and  since  when  I  was  a  working 
employer,  and  when  I  look  back  I  can  say  it  was  my  own  fault.     I  remember  one 
time  getting  nipped  with  a  big  load  of  stone  on  a  truck.     I  was  simply  an  ass  to  get 
into  The  way.     When  I  was  a  workman  I  had  this  finger  torn,  and  it  was  my  own 
fault.     I   foolishly   put  my   hand   in   a  place   where    I   knew   there   was   danger. 
I  couldn't  blame  the  employers  though  the  employers  were  there,  but  whenever  I 
did  anything  like  that  they  were  very  decent  to  me,  and  I  have  tried  to  be  decent  to 
my  own  men.     I  just  wanted  to  refer  to  a  few  instances  that  came  under  my 
notice  in  the  way  of  accidents.     At  our  own  factory  we  had  a  belt  running  a  couple 
of  feet  from  the  floor,  but  it  was  fenced  off  so  that  to  get  in  there  you  would  have 
to  deliberately  get  over  the  fence.     One  day  one  of  the  lads — I  didn't  know  it,  but 
he  had  been  fooling  in  some  way  and  got  a  stick  over,  and  he  made  a  jump  to  get 
over  the  belt.     He  pulled  off  the  switch  to  disconnect  the  electric  motor,  but  the 
machine  was  still  running,  and  he  made  a  jump  to  get  over  and  he  missed  it,  and  he 
hit  the  belt  and  his  foot  went  in  and  it  broke  his  leg.     Now,  if  he  went  right  behind 
that  guard  he  wouldn't  have  got  into  that  trouble.      That  cost  me  quite  a  lot 
of  money,  for  I  took  care  of  him  and  saw  that  everything  was  looked  after,  and  I 
took  him  back  again.     I  had  another  case  in  my  mind.     There  were  foremen 
around  the  place  watching  them,  but  if  they  are  going  to  do  things  on  the  sly  they 
are  going  to  do  them.     A  boy  threw  some  water  on  a  man,  and  the  man  ran  after 
him,  and  the  boy  ran  behind,  a  machine  and  the  machine  was  like  in  the  corner  of 
the  room  so  that  you  would  have  to  run  into  danger  to  run  into  the  corner.     The 
boy  to  get  away  from  the  man  ran  into  the  corner  and  the  man  after  him,  and  they 
started  to  wrestle,  and  he  threw  his  leg  up  and  he  caught  it  into  a  gear  which  was 
guarded  on  the  top  but  not  on  the  bottom,  and  that  gear  ripped  down  his  leg.     Well, 
we  fixed  him  up,  and  that  cost  us  some  money,  and  took  him  back.    He  left  me  in 
in  a  very-  mean  way,  but  he  had  a  chance.     Then  there  was  another  case  came  before 
me.     He  was  a  feeder  on  a  machine  and  he  was  running  it,  and  they  were  fooling 
and  throwing  some  joke  at  somebody  else,  and  as  he  put  his  foot  on  the  stand  of 
the  press  he  slipped,  and  as  he  slipped  he  fell  over  and  his  hand  went  under  the 
machine  opposite  and   he  had  his  hand  badly  hurt.      All   this  goes   to   show   it 
was  the  fault  of  the  workmen.     There  wasn't  anything  about  the  machine  to  injure 
hi  in  if  they  were  acting  properly. 

The  Commissioner:     What  made  him  slip? 

Mi;.  Harris:     He  was  fooling.     He  went  to  make  a  jump  for  this  stand  and 
miscalculated  and  slipped. 

The   worst   accident   I   ever   saw   or  had    anything   to    do   with    myself,   was 

where  a  lad  lost  hi?  hand  in  my  own  place.     He  is  with  me  yet  and  I  am  trying 

compensate  him  by  teaching  him  to  be  a  traveller.     I  am  looking  after  him  in 

tv  way  bo  thai  his  livelihood  will  be  even  better  as  a  traveller,  his  earning  power 

would  be  better,  than  a  mechanic.     I  cannot  give  him  his  hand  back  but  I  can  do 

what   I  can  to  see  thai  he  is  not  handicapped  in  life's  battle.     This  lad  was  a  very 

-r'""l  boy  too.     The  machine  was  not  running  more  than  600  revolutions  an  hour, 

and  that   is  pretty  slow.     The  boy  was  a  good  boy  and  he  was  getting  his  form 

idy,  and  he  was  feeling  very  happy  in  the  fact  that  it  was  all  ready  to  go  ahead, 

!  he  took  the  Efheel  "IT  with  his  hand  some  way.  and  he  was  humming  some  kind 

of  a  tunc,  ot  whistling,  and   he  laid   his  other  hand   right  on  the  plate,  and  he 


1912  WORKMEN'S  COMFENSATIOX  COMMISSION.  305 


had  put  the  form  clown  and  was  looking  at  it.  and  his  hand  went  right  off. 
He  didn't  do  it  on  purpose.  Just  like  Mr.  Miller  said  he  was  concentrated. 
It  wasn't  like  some  who  are  looking  always  for  six  o'clock,  and  pay  day  to  come. 
I  bought  him  the  best  hand  I  could  buy  and  took  care  of  him,  and  paid  his  salary, 
and  now  I  am  training  him  to  be  a  traveller,  and  I  hope  by  that  means  to  start 
him  off  in  life  in  a  fair  way.  But  in  these  cases,  and  even  in  my  own  case,  it 
was  carelessness  on  the  part  of  those  who  were  doing  the  work. 

Mr.  James  Smpsox:  Will  you  just  bear  with  me  while  I  give  one  illustra- 
tion. When  I  first  came  to  Canada  I  went  into  a  tin  factory  and  worked  there 
for  three  years  and  three  months-  There  wras  one  department  in  this  factory 
where  there  was  a  very  good  foreman,  and  his  duties  were  generally  to  instruct 
the  other  fellows  how  to  work  with  their  machines  so  as  not  to  meet  with  accidents. 
One  day  he  was  fixing  a  machine,  and  it  was  a  case  of  putting  the  dies  into  a 
•certain  press  to  get  it  out  of  a  certain  amount  of  tin.  He  was  an  exceptionally 
careful  man.  He  had  the  belt  off  the  tight  pulley  on  to  the  loose  pulley,  but  he 
had  got  the  dies  in  such  a  position  where  they  were  just  about  accurate,  and 
he  had  turned  on  the  belt  on  to  the  tight  pulley.  He  had  left  the  hammer  on 
the  side  where  he  was  placing  the  dies,  and  he  had  let  the  strip  go  once  or  twice, 
and  he  felt  it  had  caught  a  little.  He  hadn't  his  foot  near  the  trip  at  all  just  at 
this  moment,  but  for  some  reason  or  other  he  had  just  put  his  hand  inside  the 
die  to  kind  of  give  it  a  little  shift  over,  when  the  hammer  with  the  vibration 
of  the  machine  fell  on  the  trip,  and  the  die  came  down  and  cut  his  hand  off- 
It  was  a  clear  case  of  accident.  I  don't  know  whether  you  wrou!d  call  that  an 
accident,  but  he  had  his  foot  away  from  the  trip  altogether.  He  never  anticipated 
any  clanger,  hut  he  had  forgotten  all  about  the  hammer,  and  the  vibration  of 
the  machine  forced  the  hammer  onto  the  trip  and  off  went  his  hand.  N"ow,  some 
people  might  say  that  was  carelessness  and  say,  "Why  did  you  leave  the  hammer 
on   the  machine  ?" 

Mr.  Fleming:  It  is  pretty  hard  for  a  man  to  think  and  do  two  things  at 
the  same  time.  Either  he  may  go  a  little  wide,  like  in  a  game  of  curling,  or 
not  go  far  enough-  If  he  gets  both  things  right  at  the  same  time  he  makes  the 
shot.  Similarly  with  a  man  on  a  machine,  he  has  got  to  think  of  more  than  one 
thing  at  a  time,  otherwise  things  are  going  to  happen.  I  heard  of  a  case  the 
other  day.  Who  would  be  at  fault  in  a  case  like  this?  Of  course  in  all  these  acci- 
dents, no  matter  whether  it  is  the  workman's  fault  or  the  employer's  fault  his 
family  suffers  all  the  same,  and  we  want  to  enunciate  the  principle  that  if  a  man 
is  injured  his  family  is  entitled  to  something,  no  matter  whose  fault  it  is.  But 
here  is  a  man  goes  into  a  factory,  and  he  has  no  business  in  that  particular  de- 
partment at  all.  There  is  an  electric  hammer  there,  and  he  picks  it  up,  and  these 
things  work  very  fast.  You  have  heard  these  hammers  rattling  when  buildings 
are  being  riveted.  He  takes  hold  of  the  thing  and  he  looks  down  the  barrel  of  it — 
a  very  foolish  thing  to  do  with  a  gun — and  the  first  thing  he  touches  a  spring  and 
the  thing  shoots  out  and  hits  him  in  the  eye,  and  the  eye  is  gone.  Whose  fault  is 
it?  He  had  no  business  touching  that  tool  at  all,  but  he  did  it,  and  the  accident 
happened.  All  these  things  have  to  be  taken  care  of.  It  is  just  one  of  these  things 
in  the  general  average  of  accidents  that  happened.  We  as  employers  think 
that  while  we  believe  that  a  man  should  be  compensated,  still  there  should  be  some- 
thing which  will  deter  a  man  from  being  grossly  careless  or  drunk,  or  doing  things 
on  purpose.  While  we  feel  his  family  should  be  compensated  in  some  way,  we  feel 
there  should  be  some  penalty  whereby  you  can  deter  that  man. 

Mr.  Simpsox  :     Your  Lordship,  just  let  me  give  you  an  illustration.     Here 
?0  L. 


306 


MINUTES  OF  EVIDENCE:  No.  65 


is  a  sheet  of  tin.  In  the  interests  of  the  economy  of  production  the  manufacturer 
seeks  to  get  as  many  round  pieces  out  of  a  given  quantity  of  tin  as  he 
possibly  can.  Of  course  the  action  of  the  press  depends  upon  the  trip  and  the  man 
has  his  foot  generally  on  the  trip,  and  he  touches  it  every  time  he  wants  the  die  to 
come  down.  There  is  a  square  piece  of  tin.  When  he  is  cutting  over  at  this  side 
there  is  no  danger  because  his  hand  is  over  here,  but  when  he  gets  to  this  end  his 
hand  is  getting  nearer  to  the  die.  I  have  seen  half  a  dozen  accidents  in 
factories  where  the  accident  has  happened  in  the  interests  of  economy,  just  getting 
too  close  and  putting  his  finger  too  close,  and  off  comes  his  finger. 

hi  my  opinion  a  system  of  workmen's  compensation  will  always  work 
out  in  this  way,  that  the  employer  who  has  a  machine  of  that  nature,  if  the  most 
of  the  accidents  result  from  the  involuntary  use  of  the  foot  on  the  trip,  will  devise 
some  other  means  of  operating  that  machine.  Although  I  am  not  a  mechanic  by 
trade  I  see  no  reason  why  the  trip  should  not  be  abolished  altogether,  and  the 
action  of  putting  a  piece  of  sheet  iron  or  a  piece  of  tin  into  this  die,  if  it  was  a 
certain  gauge  the  machine  would  operate,  and  it  would  eliminate  entirely  the  foot 
action  altogether,  and  it  would  simply  eliminate  a  great  deal  of  danger  to  the 
employee  and  be  a  great  benefit  to  the  employer.  Being  a  member  of  the 
Royal  Commission  on  Industrial  Training  I  have  been  in  a  great  many  factories 
in  Canada,  and  I  have  observed,  as  one  factory  has  been  mentioned,  the  Inter- 
national Harvester  Company — I  have  observed  their  system,  and  it  is  a  good  one 
for  the  prevention  of  accidents  for  this  reason,  that  they  are  always  encouraging 
the  employees  by  a  bonus  or  some  kind  of  reward  to  invent  some  kind  of  preventive 
device  which  will  eliminate  the  risk  in  their  factory,  with  the  result,  as  you  will 
find,  according  to  the  statement  of  the  representative  of  the  employers,  that 
accidents  have  been  to  a  great  extent  eliminated,  and  their  premiums  are  much 
less  than  they  would  be  if  they  were  participating  in  any  other  kind  of  insurance 
scheme.  The  risk  involved  in  connection  with  the  operation  of  machinery  is 
bringing  a  great  many  manufacturers  to  substitute  the  automatic  machine  for  the 
humanly  operated  machine,  and  I  was  rather  surprised  to  see  in  a  number  of  manu- 
facturing establishments  five  or  six  machines  being  operated  without  a  piece  of 
human  power  attached  to  them. 

Mr.  Wegexast:  You  wouldn't  like  that? 

Mi;.  Simpson:  Never  mind,  the  time  will  come  when  this  will  work  out  to 
be  a  benefit.  To-day  it  is  not  a  benefit,  but  the  day  will  come  when  it  will  be. 
I  .nil  merely  illustrating  that  when  you  place  the  responsibility  upon  the  employer 
he  tendency  is  in  the  direction  of  prevention.  He  will  see  that  his  factory  is 
run  according  to  (lie  best  methods,  and  he  will  see  that  the  accidents  will  be 
dim 

Mi:.    Earris:     The  employee  is  careful  when  you  give  him  a  bonus? 
Mi;.  on:    No,  that  wasn't  the  statement  I  made.    My  statement  was  the 

to  the  employee  to  invent  something  that  would  be  to  the  ad- 
\;"  ''  the  employer  in  preventing  accidents,  and  it  had  resulted  in  some  of 

being  much  improved  along  that  particular  line.     I  have  always  con- 
ended,  your  Lordship,  that,  so  far  as  the  workmen  are  concerned,  in  my  estim- 
no  workman  would  be  insane  enough  to  purposely  be  so  careless  as  to  cut 
off  a  finger  or  endanger  his  own  life.     There  must  be  a  great  many  other  factors 
tering  into  the  cause  of  such  an  accidenl  if  such  occur*.     Tf  he 'is  drunk  while 
his  occupation  and  an  m ■■■  ml. mi  occurs  T  say  the  fault  rests  with  the  employer 
for  having  such  an  employee  in  his  employ,  and  the  labour  movement  in  this  country 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  307 

will  strongly  condemn  any  employee  who  so  disregards  his  own  family  and  per- 
sonal interests  as  to  go  into  a  factory  drunk  to  his  daily  occupation.  The  fact  of 
the  matter  is  to-day  you  will  see  that  the  big  railroad  corporations  will  absolutely 
not  employ  a  man  where  life  is  at  risk  at  all  who  indulges  in  intoxicating,  bever- 
ages. We  are  heartily  in  accord  with  that,  and  we  strongly  condemn  a  man  going 
into  a  factory  and  endangering  his  own  life  and  the  interests  of  his  family  who 
are  dependent  upon  him. 

Mi;.  Wegenast:  There  is  one  method  of  penalizing  employees  for  carelessness 
and  misconduct,  to  make  the  penalty  not  contingent  upon  the  accident  happening, 
but  to  have  a  penalty  in  every  case  where  there  was  carelessness,  and  to  have  some 
method  of  enforcing  the  rules,  because  it  is  not  always  the  careless  man  who  is 
injured. 

The  Commissioner:     You  would  want  another  court  to  enforce  that. 

Mr.  Fleming  :  I  would  not  like  to  leave  the  statement  unchallenged  that  it 
is  the  employer's  fault  if  a  man  is  drunk  at  his  work.  Your  Lordship,  I  have  on 
more  than  one  occasion  had  a  man  come  into  the  shop  where  I  was  superintendent, 
in  the  old  days,  and  that  man  would  be  perfectly  sober  when  he  came  to  work, 
.uid  he  could  set  type  and  set  type  well,  and  at  ten  o'clock  in  the  morning  I  have 
found  him  entirely  incapacitated  at  his  frame.  He  had  become  drunk  after  he 
came  into  the  shop.  Now,  that  does  happen.  It  is  easily  understood  that  no 
employer  will  let  a  man  who  is  drunk  and  knows  he  is  drunk  go  in  and  go  to 
work,  but  there  are  any  number  of  instances  where  men  will  come  in  perfectly 
sober  and  will  become  drunk  after  they  get  there. 


EIGHTH   SITTING. 


Legislative  Buildingj  Toronto. 

Friday,  19th  January,  1912,  10.30  a.m. 

Present:  Sir  William  R.  Meredith,  Commissioner. 
Mr.  W.  B.  Wilkinson,  Law  Cleric. 

The  Commissioner:  Is  there  anyone  who  wishes  to  be  heard  this  morning? 

Mr.  Wegenast  :  Mr.  John  Ransford  is  here,  and  I  would  like  if  your  Lord- 
ship would  hear  what  he  has  to  say,  as  he  is  anxious  to  get  away. 

Mr.  John  Ransford  :  My  Lord,  I  have  not  come  here  prepared  as  I  would 
like  to  have  been  had  I  known  that  I  would  have  been  asked  to  give  any  evidence 
before  a  meeting  of  this  description.  Being  in  the  city.  I  called  on  my  friend 
Mr.  Wegenast  this  morning,  and  he  said,  I  wish  you  as  a  man  who  at  one  time 
earlier  in  life  was  hired  out  in  the  lumber  woods  in  the  United  States  and  knows 
some  of  the  conditions  of  the  workingman,  and  also  as  an  employer  of  labour,  and 
as  a  member  of  the  Manufacturers'  Association,  but  one  who  has  not  been  con- 
nected with  the  committee  in  any  way  or  shape,  would  tell  the  Commissioner 
briefly  your  views  upon  the  subject.  I  have  been  an  employer  of  labour  now  for 
a  great  many  years,  and  have  gone  through  necessarily  the  various  stages  that 


308  MINUTES  OF  EVIDENCE:  No.  65 

1 

we  have  to  pass  through  in  this  country  with  regard  to  the  relations  between  em- 
ployer and  the   employed.     Of   course,   as   your   Lordship   is   fully   aware,   many 
years  ago  there  was  little  or  no  legislation  upon  this  subject,  and  the  conditions 
existing  then  between  the  employer  and  the  employed  were  more  satisfactory  than 
they  are  to-day.     1  mean  by  that  that  there  was  a  very  faint  reflection  of  the 
feudal  system  in  this  regard,  that  the  employer  looked  upon  his  employees  with 
more  or  less  of  a  protecting  aspect,  and  I  think  I  would  be  borne  out  by  others 
in  saying  that,  generally  speaking,  there  was  a  much  better  condition  of  feeling 
pertaining  between  the  employee  and  his  employer.     In  other  words,  if  any  man 
got  hurt   during  the   time   he   was   acting  in   that  position  the   employer  would 
almost  necessarily  do  what  he  could  as  regards  helping  him  in  any  trouble  that 
overcame  him.     That  condition  of  things  gradually  changed  until  we  were  finally 
face  to  face  with  a  very  objectionable  condition,  namely,  that  of  the  unscrupulous 
lawyer  who,  the  moment  he  hears  of  an  accident,  no  matter  where  the  fault  may 
be,  instantly  rushes  off  to  the  bedside  of  the  employee,  and  conjures  and  implores 
him  to  let  him  take  up  the  case  and  conduct  it  for  him,  engaging  to  charge  him 
nothing  unless  he  gets  his  costs  out  of  the  defendant.     That  condition  of  affairs 
gradually  got  wrorse  and  worse  until  to-day  it  is   almost  proverbial,   and  conse- 
quently many  manufacturers   have   been   more  or   less   against  their  will    driven 
into  the  position  of  taking  out  an  insurance  policy  with   a  company,   which   is 
detrimental,    to    a    large    degree,    to    the    best    interests    of    both    employer    and 
employed,   and   also   of   that    condition    of   things    which    allows    the  friendliness 
and    good    fellowship    and    mutual    regard    that    should    exist    between    employer 
and   employee.       In   other   wrords,   this    policy   that    we    take    out,    as    you   well 
know,    my    Lord,    simply    transfers    the    obligations    of    fighting    any    and    every 
claim    to   the   insurance   company    and    leaves   the    employer   to    a    great    extent 
free.     A  very  great  objection,  of  course,  to  that  is  that  it  is  not  in  one  way  fair 
upon  the  employees  in  that  they  have  to  withstand  the  whole  influence  and  money 
power  and  fighting  ability  in  various  directions  of  this  insurance  company.  There- 
fore, I  for  one  at  least,  and  I  am  sure  I  speak  for  a  large  number  of  my  fellow 
employers  of  labour,  say  that  we  would  gladly  welcome  anything  in  the  shape  of 
legislation  that  would  ameliorate  that  present  condition  of  affairs.     As  I  told  you, 
I    have    not    had    the    time    to    give    to    this    that    I    would    have    liked,    and 
my  ideas  consequently  are  in  somewhat  of  a  crude  condition,  but  at  the  same 
time   I  have  given  it  enough   consideration   to  have   determined  that   so   far  as 
my  nun  unimportant  individual  opinion  is  concerned  I  am  strongly  in  favour  of 
legislation  whereby  all  such  troubles  and  accidents  to  employees  should  be  pro- 
vided  for  by  an   insurance  scheme  to  which  the   State  should  lend   its  aid  to  a 
rtain  extent,  the  employer  also,  and  the  employee  also.     As  to  what  actual  frac- 
tion of  the  whole  the  employee  should  pay  and  the  employer  should  pay,  and  the 
should  pay,  is  a  matter  thai  T  am  not  prepared  this  morning  to  express  my 
opinion  upon.     It   is  more  or  less  to  my  mind  a  matter  of  detail,  or  can  be  more 
?  easily  arrived  a1   without  any  needless  friction;  but  that  the  State  shouTct 
beaT  its  pan,  and  thai   (lie  employer  should  hoar  his  part,  and  that  labour  should 
beaT  its  part,  I  have  net  the  shadow  of  a  doubt.     It  would  be  beneath  the  dignity 
or  to  consent   to  anything  else,  in  my  opinion.     It  is  the  manifest  duty  of 
'he  employers  to  do  likewise.     Although  horn  a  Tory,  I  might  say,  with  more  or 
strong  conservative  feelings,  T  am  not  at  all  scared  by  what  some  people  call 
ocialistic  tendency  of  such  a  measure  as  1  propose.     If  it  is  to  be  socialistic 
mu-t    be,  but    thai    need   nol   be  an   insuperable  barrier  in  my  mind.     I  agree 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  309 

fully  with  cue  item  that  1  heard  my  friend  Mr.  Wegenast  speaking  of  in  pre- 
senting his  brief  before  your  Lordship,  and  abqat  which  your  Lordship  also  made 
some  remark,  namely,  that  no  class  of  the  community  should  be  exempt.  If  it 
is  necessary,  as  I  think  it  is,  to  introduce  both  domestic  servants  and  farmers, 
and  others  who  are  now  outside  the  pale  of  this  more  favoured  region,  I  see  no 
reason  why  they  should  not  be.  I  have  long  been  at  a  loss  to  understand  why  as 
a  manufacturer,  if  I  employ  a  man  to  work  for  me  I  am  exposed  to  certain  re- 
sponsibilities as  regards  his  care,  the  proper  conduct  of  my  work,  safeguarding 
machinery  and  other  apparatus  that  he  has  to  deal  with  in  his  daily  work,  why 
I  should  be  responsible  for  any  injury  that  may  come  to  him — if  I  am  careful  in 
every  proper  regard,  why  that  condition  of  things  should  obtain  to  me  as  a  sock 
manufacturer,  and  the  very  same  day  and  the  very  same  year  as  a  farmer,  which 
I  am,  1  can  have  my  machinery  around  the  farm  in  any  state  of  disrepair,  in  any 
state  of  danger,  it  matters  not,  and  the  man  who  is  working  on  my  farm  may 
get  injured,  and  I  am  immune  from  all  responsibility. 

The  Commissioner  :  Perhaps  that  overlooks  the  fact,  Mr.  Ransford,  that  you 
would  be  liable  in  a  case  at  common  law  for  neglecting  to  provide  proper 
machinery.     The  common  law  liability  would  remain  there. 

Mr.  Ransford:  I  merely  stated  that,  my  Lord,  because  I  was  under  the  im- 
pression  that   the  farming   community   were   immune   from   responsibility. 

■  The  Commissioner  :  No,  they  are  immune  under  our  act,  and  some  other 
acts,  and  I  suppose  from  what  Mr.  Boyd  has  told  me  they  would  be  in  the  State 
of*  Ohio,  because  there  are  very  few  farmers  employing  five  men. 

Mr.  Boyd:  At  present  they  are  immune,  but  in  the  course  of  a  few  years 
they  will  be  brought  under  the  act  too. 

Mr.  Ransford  :  I  was  very  much  struck  in  this  regard  by  a  lecture  I  listened 
to  by  a  gentleman  from  the  States  last  Fall.  While  statistics  in  North  America 
generally  were  wanting,  yet  from  Germany  he  was  able  to  furnish  them,  and  to  my 
utter  astonishment  he  showed  us  that  the  statistics  in  Germany  proved  that  ac- 
cidents to  the  working  classes  on  the  farm  were  far  more  numerous  than  any  other 
class. 

Mr.  Boyd:  43  per  cent,  of  all  the  accidents. 

Mr.  Ransford:  Greater  than  braking  on  the  railroad,  greater  than  tend- 
ing a  buzz-saw,  greater  than  working  on  a  scaffold  in  bricklaying,  or  working  as 
a  locomotive  engineer.  Any  calling  you  can  mention  fell  down  in  comparison 
to  the  number  of  accidents  that  happen  on  a  farm.  Another  very  surprising 
thing  that  struck  me  was  this :  that  not  only  was  that  the  case,  but  the  principal 
source  of  accident  on  the  farm  is  not  in  connection  with  machinery  such  as 
threshing  machines,  mowers  or  reapers,  as  one  might  expect,  but  the  large  per- 
centage of  accidents  on  the  farm  arise  from  the  comparatively  trifling  sources  of 
the  falling  of  ladders,  the  falling  of  pitchforks,  and  such  like.  I  do  not  know 
that  there  is  anything  else  that  would  warrant   my  occupying  your  time. 

The  Commissioner:  I  would  like  to  ask  one  question.  Of  course,  to  get 
at  the  bulk  of  the  accidents,  the  number  of  accidents  is  not  probably  a  fair  test. 
It  may  be  that  a  large  majority  of  the  farming  accidents  are  trifling.  However, 
I  suppose  there  are  statistics  which  show  how  that  is. 

Mr.  Wegenast  :     Yes,  your  Lordship,  there  are  complete  statistics. 

Mr.  Doggeit:  I  would  like  to  ask  a  question.  Do  you  not  think  the  workers 
would  pay  enough  by  being  consumers,  and  also  if  the  State  took  some  part  of 
the  burden   of  insurance  that  they  would   also.   a~   tax   payers,  be   paying  again? 


310 


MINUTES  OF  EVIDENCE:  No.  65 


Mb.  Kansford:  As  I  told  you,  I  am  not  at  all  prepared  to  say  yet  what 
fraction  should  be  borne  by  the  State,  what  fraction  by  the  employer,  and  what 
fraction  by  the  employee,  but  I  do  think  that  labour  itself  would  demand  as  its 
right  that  it  should  pay  a  certain  percentage.  I  do  not  think  that  it  would  pay 
enough  under  present  conditions,  without  paying  something  more,  however  small 
a  part  it  might  be.  I  think  out  of  self-respect  to  itself  it  would  demand  to  pay 
a  certain  fraction.  I  do  not  say  a  large  one,  but  I  say  a  certain  fraction  should 
be  paid  by  the  employee,  a  certain  fraction  by  the  employer,  and  a  certain  fraction 
by  the  Government. 

The  Commissioner:  Mr.  Doggett,  do  you  not  look  just  at  one  side  of  that 
question?  Undoubtedly  the  workingman  to  the  extent  that  he  is  a  consumer 
would  pay  a  proportion  of  the  cost,  but  so  would  the  manufacturer.  Besides 
paying  the  tax  he  would  be  probably  a  larger  consumer  than  the  employee,  and 
he  would  pay  as  a  consumer  just  in  the  same  way  that  the  employee  does.  Does 
not  that   strike  you   as  reasonable? 

Mr.  Doggett  :  Yes,  but  your  Lordship,  the  number  of  manufacturers  as  con- 
sumers are  a  very  small  percentage. 

The  Commissioner  :  That  does  not  make  any  difference.  To  each  man  it 
would  be  the  same.  Upon  the  hypothesis  that  we  are  discussing  the  matter,  he 
would  have  added  the  burden  of  this  tax.  You  are  a  carpenter.  Now,  the  master 
builder  pays  a  tax.  For  everything  he  buys  from  the  furniture  man,  or  any  other 
thing  that  is  manufactured,  he  has  to  pay  his  proportion  of  the  tax,  just  the 
same  as  the  workingman.  That  argument  does  not  impress  me.  I  think  you 
want  to  look  a  little  further  before  you  conclude  that  it  would  be  unjust  for  that 
reason. 

Mr.  Doggett:  Yes,. but  your  Lordship,  why  should  not  the  worker  at  the  pre- 
sent time  pay  towards  fire  insurance  individually? 

The  Commissioner  :  That  is  a  different  proposition,  because  the  fire  insurance 
does  not  help  him,  and  this  scheme  helps  the  employee.  The  fire  insurance  only  helps 
the  employer.  I  do  not  think  that  is  analogous.  I  am  not  expressing  any 
opinion  as  to  whether  it  is  right  that  the  employees  should  pay  any  proportion 
of  the  tax,  but  it  strikes  me  that  the  argument  that  was  suggested  yesterday,  and 
I   you  have  repeated,  is  unsound.     Just  think  that  over. 

Mi;.  Doggett:  I  fail  to  see  yet  where  the  workmen  make  a  direct  contribu- 
tion.    T  admit  there  is  a  waiting  period  under  certain  acts. 

'I'm    Commissioner:  We  will  discount  Mr.  Wegenast's  figures.     There  is  a 
trillion  dollars  to  be  raised  every  year  by  a  tax  upon  industry  to  meet  the  acci- 
ba1  happen.     The  employer  contributes  to  that  tax,  and  the  workman  con- 
tributes to  that  tax.     Now,  when  they  come  to  go  into  the  market  to  buy  what  they 
manufactured  article  the  employer  pays  his  portion  over  again  just  as 
much  a-  the  workman  does.     Does  it  not  strike  you  that  way? 

M"R-  Doggett:     Yes,  I  recognize  thai  fact,  your  Lordship. 

FORD:  Might   I  say  one  thing  more   before  I  go  which  occurs  to  me 

in  connection  with  whal   Mr.  Doggetl  has  said.     The  matter  was  brought  up  yes- 

fche  employer  to  reimburse  himself  for  what  he  will  have  to  pay 

under  Ibis  proposed   3cheme,  and  the  idea  was  mooted  that  he  could  increase  the 

price  ->f  his  manufactured  article,  and  the  public  eventually  would  have  to  pay 

Well,   while   thai    might  be  the  case  in  connection  with  some  products  of 

mufaeture,   I    venture  as  a   manufacturer  to  say  it  would  be  an  impossibility 

with  regard  to  all.     F  am  confidenl  beyond  a  doubt  that,  with  regard  to  the  pro- 


1912  WORKMEN'S  COMPENSATION  COM. MISSION.  311 

duct  that  I  manufacture,  I  would  not  be  able  to  enhance  the  value  of  my  manu- 
factured product  one  iota,  and  consequently,  although  I  favour  this  scheme,  I 
wish  to  call  the  attention  of  my  friends  to  this  fact,  that  I  am  favouring  this 
scheme  with  the  knowledge  that  it  is  at  the  loss  and  expense  of  my  own  individual 
pocket.  I  am  willing  to  do  this  because  I  consider  it  is  nothing  but  fair  and  just 
between  man  and  man,  and  under  no  other  consideration  do  I  favour  it  for  a 
moment.  1  am  gladly  willing  to  put  my  hand  in  my  pocket  and  pay  that  extra 
tax,  for  the  repayment  of  which  I  look  around  me  in  vain  for  any  source  of  re- 
payment, save  and  excepting  the  consolation  to  my  mind  that  I  have  done  what 
is  right,  and  I  have  done  something  to  introduce  a  better  condition  and  better 
feeling  between  employer  and  employee. 

Mr.  Wegenast:  I  do  not  know  that  it  is  necessary  for  me  to  say  anything  by 
way  of  introducing  Mr.  Boyd,  except  to  refer  to  our  attitude  in  the  matter.  My 
attention  was  first  called  to  Mr.  Boyd's  name  in  connection  with  the  report  of  the 
hearings  before  the  Federal  Commission.  I  subsequently  obtained  copies  of  the 
reports  and  the  Bill  from  Ohio,  and  entered  into  correspondence  with  Mr.  Boyd, 
with  the  result  that  I  asked  and  he  consented  to  appear  before  your  Lordship 
in  connection  with  this  enquiry.  We  are  bringing  Mr.  Boyd  here  in  one  sense 
as  an  expert  witness,  but  not  an  expert  in  the  character  which  is  common  in  our 
courts.  We  have  not  brought  Mr.  Boyd  to  advocate  any  particular  phase  of  the 
question,  or  to  advocate  any  particular  side.  We  are  here  to  learn  from  Mr.  Boyd 
just  as  much  as  anybody  else,  but  I  thought  myself,  and  the  committee  under 
whose  instructions  I  am  working  thought  it  would  be  of  interest  and  profit  to  have 
a  man  of  Mr.  Boyd's  experience  and  capacity  to  discuss  with  us  these  questions 
before  your  Lordship.  It  is  Mr.  Boyd's  misfortune  that  he  is  a  citizen  of  the 
United  States,  but  the  questions  which  arise  in  the  different  jurisdictions  of  the 
United  States  are  very  similar  to  the  questions  arising  here,  with  this  exception, 
that  we  eliminate  the  constitutional  phase  which  forms  so  large  a  factor  in  the 
consideration  of  the  subject  in  the  United  States.  I  do  not  think  it  is  necessary 
for  me  to  say  anything  more  by  way  of  introducing  Mr.  Boyd  of  the  Ohio  Commis- 
sion. 

Mr.  James  Harrington  Boyd,  (Toledo,  Ohio)  :  I  may  first  say,  "your  Lord- 
ship, that  the  sources  of  information  of  which  I  shall  give  a  brief  review  will  be 
found  published  by  me  in  the  following  publications:  In  the  first  place  in  the 
report  of  the  Employers'  Liability  Commission  of  Ohio,  of  which  I  was  Chairman, 
parts  1,  2,  and  3 ;  in  the  second  place  in  the  Magazine  World,  under  date  of  July, 
1911  ;  in  the  third  place  in  the  Annals  of  the  American  Academy  of  Political  and 
Social  Science  of  the  United  States  for  July,  1911;  in  the  fourth  place  in  the 
American  Journal  of  Sociology  for  January,  1912;  and  in  the  fifth  instance  in  the 
record  of  the  Employers'  Liability  and  Workmen's  Compensation  Commission  of 
the  United  States,  page  718. 

Now,  your  Lordship,  I  want  to  point  out  the  fact  generally  that  there  is  no 
paradox  in  this  investigation  and  the  laws  that  were  finally  passed  in  Ohio,  and 
so  I  will  mention  these  points  as  I  go  along.  A  republican  legislature  in  the 
spring  of  1910  authorized  the  Governor  to  appoint  a  Commission  consisting  of 
five  individuals,  two  employers,  two  representatives  of  labour  organizations  and  one 
neutral  person,  lawyer  or  otherwise.  The  Governor  appointed  on  that  commission  in 
June,  1910,  two  representatives  of  labour;  two  representatives  of  emplo}rers,  and  my- 
self. We  began  our  investigations  in  July,  1910,  and  I  conducted  twenty-seven  public 
hearings  in  different  parts  of  the  State,  notably  in  Dayton,  Cincinnati,  Cleveland, 


312 


MINUTES  OF  EVIDENCE:  No.  65 


Tole  lo  Youngstown  and  Columbus.  We  also  operated  with  the  Commission  of  Massa- 
-  and  mi  her  States  in  bringing  about  a  conference  of  all  the  liability  corn- 
miss  of  the  United   States,  nine  in  all,  including  the  National  Commission, 

the  I  ommissioner  of  Labour,  Mr.  Neill,  and  we  had  conferences  at  eight  sessions 
in  Chicago  in  November,  1910.  If  your  Lordship  does  not  have  a  copy  of  the 
tort  of  that  conference  I  shall  be  delighted  to  make  you  a  present  of  one.  To 
my  mind  that  is  the  most  remarkable  hearing  that  has  been  held  on  this  question 
on  this  continent.  Now,  we  met  together  there  in  Chicago — the  Commissions  for 
Massachusetts,  Connecticut,  New  Jersey,  Ohio,  Illinois,  Wisconsin,  Montana,  Wash- 
ington, and  the  United  States  Commission,  and  the  Commissioner  of  Labour  for 

United  States.  Everybody  was  intensely  interested.  Eor  example  Mr.  Dixon, 
who  was  President  of  the  United  States  Steel  Corporation  thought  he  would  take 
a  look  in  at  us,  and  possibly  go  home  in  the  evening,  and  before  Ave  got  to  the 
middle  of  the  afternoon  he  was  using  the  long  distance  telephone  to  New  York 
cancelling  all  appointments,  and  during  the  eight  hearings  of  two  or  three  hours 
each  there  wasn't  a  single  man  left  the  room  from  the  time  he  entered  until  the 
close  of  those  eight  hearings.  We  closed  our  hearings  on  December  1st.  1910. 
Then  we  had  December,  January,  February,  and  March  of  1911  in  which  to 
write  the  report  and  draft  a  Bill  and  get  it  into  the  legislature,  and  whip  it 
through  the  legislature,  and  finally  we  got  it  through  in  June,  1911. 

Now,  these  investigations  of  which  I  shall  give  a  resume  can  be  put  in,  and 
then  with  your  Lordship's  permission,  at  the  close  we  will  ask  the  stenographer 
to  put  in  this  brief  which  contains  a  concise  resume  of  all  the  historical  and 
economic  investigations  that  have  been  made  up  to  the  time  of  the  writing  of  the 
brief,  with  footnotes  showing  the  sources  of  information.  This  brief  was  used  by 
me  as  special  counsel  for  the  State  before  the  Supreme  Court  in  1911  'in  contest- 
ing the  constitutionality  of  the  Ohio  Act,  about  which  I  shall  explain  in  the  course 
of  my  talk.  Now,  as  to  the  manner  of  procedure  in  going  into  this  proposition — 
we  recognize  from  the  start  that  it  was  a  question  of  abandoning  an  old  remedy 
more  than  one  hundred  years  of  age,  and  the  establishment  of  a  new  remedy  entirely 
different  in  its  nature,  and  therefore  it  would  require  all  the  fundamental  and 
economic  facts  gathered  together  to  justify  the  courts  in  substantiating  a  new  remedy 
in  place  of  the" old  remedy,  because  in  the  end,  whether  the  form  of  our  Government 
is  republic,  democratic,  limited  or  absolute  monarchy,  the  remedy  itself  must  be 
ised  upon  the  solid  economic  facts,  in  order  to  mete  out  Christian  justice. 

Now,  first  a  brief  resume  of  the  historical  evolution  of  the  problem.    In  1837, 
Priestly    v.    Fowler    decided    by    Lord    Abinger    in    England,    the    fellow-servant 
rule  was  introduced.     That  was  a  case  where  a  butcher  had  an  assistant  butcher, 
and  through  the  negligence  of  the  boy  driving  the  waggon  the  assistant  butcher  was 
iously  injured.     Then  it  was  for  the  lord  to  determine  whether  it  would  be  most 
ju-t  in  t lie  course  of  time,  and  at  that  time,  to  introduce  the  rule  to  make  the  em- 
ployer Liable  for  the  negligence  of  the  fellow-servant,  or  to  allow  the  injured  person 
to  beaT  the  hardship.   Now, I  lay  particular  stress  upon  the  principle  as  Lord  Abinger 
discussed  it  in  thai  case,  for  the  particular  reason  that  later  in  my  remarks  I  shall 
call  attention  to  the  fact  as  to  why,  in  my  opinion,  looking  at  it  as  a  scientific  inves- 
tor, regardless  of  whal  political  parties  may  think,  the  insurance  principle  is  the 
'v  principle  whereby  you  can  protect  the  small  employer  and  furnish  the  workmen 
the  small  employer  the  same  protection  at  the  same  cost  that,  for  example,  the 
national  Harvester  Company  or  the  United  States  Steel  Corporation  can  fur- 

i  compensation  to  it-  injured  workmen.     So  his  Lordship  held  that  it  would  be 

t  jusi   not   to  burden  the  employer  with  that  liability. 


1912  WOEKMEN'S  COMPENSATION  COMMISSION.  313 

In  Ohio  50  per  cent,  of  our  employers  employ  less  than  twenty  men,  and 
it  is  the  hope  of  every  workman  that  lie  ultimately  will  become  an  employer,  and 
his  total  capital  may  be  $1,000,  $2,000,  $5,000  or  $10,000.  If  he  can  insure 
himself  against  liability  by  paying  his  pro  rata  share  and  protect  himself,  and  furn- 
ish his  workmen  the  same  protection  that  the  United  States  Steel  Corporation  has, 
that  is  what  he  wants. 

In  1838  Prussia  abolished  not  only  the  fellow-servant  rule,  but  also  in- 
troduced the  rule  of  the  assumption  of  risk  by  all  railroad  employers.  In  1842 
Justice  Shaw,  of  Massachusetts,  introduced  the  rule  of  the  assumption  of  risk,  after 
Prussia  abolished  it.  Now,  the  social  philosophers,  beginning  with  Fichte  in  1790, 
and  Marx.  Sismondi,  Winkleblech,  Schmoller,  and  Wagner — all  these  social  phil- 
osophers kept  up  the  constant  agitation  that  owing  to  the  evolution  of  manufactur- 
ing industries  the  State  owed  a  greater  duty  as  to  the  protection  of  the  weak  as 
against  the  strong.  So  that  Prussia  in  1854  made  it  obligatory  upon  employers 
who  had  among  his  employees  members  of  a  mutual  employees  association  (and 
they  existed  at  that  time),  to  contribute  half  of  the  cost  of  their  benefits.  That 
continued  in  operation  until  1869  when  that  rule  was  relaxed.  Then  in  1871 
Prussia  took  away  all  the  common  law  defences  in  all  mining  operations,  and  in 
1880.  your  Lordship,  the  first  English  Liability  laws  were  introduced  in  England 
with  the  object  of  tending  to  modifying  the  rigours  of  the  defences  of  the  common 
law.  Then  came  Asquith's  Bill  in  1893,  modifying  the  rigours  of  the  common 
employment  rules.  Then  came  Chamberlain's  Act  in  1898,  the  first  English  Com- 
pensation Act,  which  makes  the  employer  personally  liable,  with  the  hope  that  he 
will  insure  against  that  liability,  without  regard  to  negligence  on  the  part  of  the 
employer  or  on  the  part  of  the  employee,  except  as  to  malicious  negligence  on  the 
part  of  both.  Then  came  the  modifying  Act  in  1906,  and  finally  the  Lloyd-George 
Act  a  few  weeks  ago,  and  I  understand,  your  Lordship,  that  is  the  law  now  in 
England.  That  act  covers  insurance  against  sickness,  accident,  old  age,  and  out 
of  work.  The  employer  contributes  one-third  to  the  cost  of  the  fund,  the  employees 
one-third,  and  the  State  one-third.  I  will  not  venture  to  state  what  has  happened 
in  the  Dominion  of  Canada,  but  in  the  United  States  during  the  last  ten  years, 
and  particularly  during  the  last  five  years,  various  states  have  been  modifying  these 
common  law  defences,  one  state  cutting  out  one  and  another  cutting  out  two,  and 
some  modifying  all  three.  For  example,  three  years  ago  in  Ohio  we  passed  what  is 
called  the  Norris  Bill  modifying  all  three  common  law  defences.  So  that  historic- 
ally the  evolution  is  to  get  rid  of  and  eliminate  the  common  law  defences  and  the 
common  law  remedies  all  over  the  world. 

Now,  as  to  the  statistical  investigations  in  the  United  States.  Beginning 
first  with  Germany  prior  to  the  passing  of  the  German  Insurance  Act,  which  all 
European  countries  adopted  in  more  or  less  modified  form.  I  want  to  call  your 
Lordship's  attention  to  this,  that  in  Bismarck's  debates  in  the  Peichstag  he  did  not 
ask  Tom,  Dick  and  Harry  to  debate  it,  he  debated  it  himself,  and  he  said  he 
regarded  it  as  his  calling  that  this  act  should  be  made  a  law.  I  give  your  Lord- 
ship in  this  brief  among  the  historical  statements  the  Emperor's  speech  which 
formulates  the  problem  from  their  standpoint.  In  New  York  State  the 
investigations  of  the  New  York  commission  showed  two  facts,  that  while  the 
liability  insurance  companies  collected  about  $24,000,000  they  paid  out  about 
$8,000,000.  and  that  wdtere  there,  were  414.000  notices  of  accidents  they  paid  some- 
thing or  other  in  about  52,000  of  the  accidents,  or  in  other  words  paid  something 
or  other  in  one-twelfth   of  the  accidents,   or  in   12   per  cent,   of  the   accidents. 


314 


MINUTES  OF  EVIDENCE:  No.  65 


the  Slate  of  Illinois  where  they  spent  a  large  sum  of  money  in  making  their 
They  found  they  paid  something  or  other  in  8  per  cent,   of  the 
idents.    In  Ohio  they  spent  $16,000  or  $18,000  investigating  all  the  accidents  in 
ga  County  during  five  years  prior  to  1910,  and  Mr.  Wilson,  Manager  of  the 
i    Insurance  Company  in  Cleveland  testified  to  having  settled  65,800   cases, 
and  in  paying  something  or  other  in  six  per  cent,  of  the  cases,  and  the  Bussell- 
Foundation    investigated   all   the    accidents    in    Alleghany    county,  Pennsyl- 
vania, during  the  years  1906  and  1907,  showing  something  or  other  was  paid  in 
ahout  ten  per  cent,  of  the  cases,  so  that  something  or  other  is  paid  according  to 
those  vast  investigations  in  from  six  to  twelve  per  cent,  of  the  cases;  and  experi- 
ence in  Germany  shows,  as  the  German  economists  pointed  out,  prior  to  the  passing 
of  the  German  Act,  they  paid  something  or  other  in  ten  per  cent,  of  the  cases. 
So  you   see  that  is  practically   an   average   of   our   experience   here.       When    I 
had  to  face  the  legislature,  with  the  vast  number  of  prominent  lawyers,  and  then 
finally  the  Supreme  Court  itself,  with  an  array  of  attorneys,  such  as  H.  and  M. 
Johnston,,  of  Cleveland,  and  Kline  &  Stone,  the  Standard  Oil  attorneys,  and  the 
attorneys   for  the   Norfolk   Eailroad   company,   and   several    other   attorneys,   we 
had  to  have  the  facts,  which  I  think  are  clearly  established  in  my  investigation  and 
pointed  out  there.     In  making  a  resume  of  the  operations  of  the  German  Act  we 
had  the  statistics  which,  your  Lordship,  were  statistics  they  had  kept  not  for  the 
purpose     for     which     I     used     them,     but     for     the     purpose     of     guarding 
against    accidents    and    to    find    in    what    respects    the    employer     might    avoid 
accidents,   how   he  might   help   to    reduce    accidents,    and    in   what    respect    the 
employee  might  be  required,  and  new  duties  imposed  upon  him,  to  reduce  the 
number  of  accidents,  and  on  the  part  of  the  State  to  reduce  the  number  of  acci- 
dents.   But  taking  a  resume  of  those  annual  reports  I  wish  to  point  out  the  follow- 
in--  fundamental  economic  results,  which  to  my  mind  enabled  me  to  convince  the 
legislature  of  the  State  of  Ohio  that  we  must  abandon — I  say  abandon — the  com- 
mon law  remedy,  for  the  basis  of  procuring  compensation  for  injured  workmen. 
The  German  Act  in  1887  covered  over  3,000,000  employees;  in  1907  it  covered 
over  27,000,000  employees.     Taking  the  decades,  1887,  1897  and  1907,  where  they 
have  millions  of  accidents  under  consideration,  the  causes  of  accidents  clue  to  the 
natural  hazard  of  the  business,  leaving  out  the  employee's  conduct  and  the  em- 
ployer's conduct  wholly,  was  44.96  in  1887,  and  in  1897,  your  Lordship,  after  the 
agricultural  labourers  came  in,  which  took  in  about  8,000,000  workmen,  the  cause 
of  accidents  attributable  to  natural  causes  of  the  business  was  42.82  per  cent., 
although  there  were  millions  more  workmen.    In  1907  when  there  were  27,000,000 
"f  workmen   under  the  act,  and  their  dependants,  the  causes  of  accidents  due  to 
■  i  u ml  hazard  was  44.35  per  cent.,  practically  a  constant  factor  of  44  per  cent. 
Thi  of   accidents   due   to  the  combined   negligence   of  employer  and 

employee,  which  to  be  sure  by  creating  care  on  the  part  of  the  employer  and  em- 
ployee  can  In-  slightly  reduced,  is  ten  per  cent,  of  all  the  accidents.  Adding  that 
to  your  II  per  cent,  ami  yon  have  54  per  cent,  of  all  your  accidents  caused  or 
due  to  fli«'  unavoidable  risks  of  the  business,  and  cannot  be  but  slightly  changed. 
For  example,  it  would  not  make  any  difference  how  careful  the  State  was,  or  how 
he  employer  mighl  be  required  to  ho,  or  the  employee  might  be  required 
to  1"'.  aboul  53  peT  cent,  of  all  the  accidents  thai  will  occur  is  due  to  the  unavoid- 
able risks  of  the  business.  You  can  reduce,  of  course,  the  number  of  accidents 
thai  will  occur  among  your  thousand  foundry  men  by  the  inauguration  of  schemes 
for  the  prevention  of  accidents  which  have  been  so  highly  developed  in  Germany, 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  315 

but  about  52  per  cent,  or  53  per  cent,  of  all  those  that  happen  are  due  to  the 
unavoidable  risk  of  the  business.  Now,  the  percentage  of  the  accidents  due  to 
the  negligence  of  the  employer  is  18,  taking  the  average  for  the  three  decades,  or 
18.4  per  cent.  The  percentage  due  to  the  negligence  of  the  employee  is  28.4  per 
cent.  Now,  for  the  28.4  per  cent,  he  cannot  recover  because  of  his  negligence 
under  the  common  law,  because  that  is  a  defence  as  a  rule.  That  only  leaves  18 
per  cent.  He  must  first  prove  his  employer  is  negligent,  and  he  can  only  do  that 
in  18  per  cent,  of  the  cases.  The  percentage  that  is  due  to  the  negligence  of  the 
fellow-servant  of  those  is  6  per  cent,  and  take  that  away  from  the  18  per  cent,  and 
it  is  12  per  cent.,  or  12.91  per  cent,  only  in  which  the  employee  theoretically  has  a 
cause  of  action.  Now,  what  is  the  difference  to  the  dependants  of  the  man  who  is 
killed  whether  his  negligence  caused  the  accident  or  not?  The  reason  that  the 
Prussian  Government  and  the  German  Empire  inaugurated  industrial  insurance 
was  to  provide  that  under  no  circumstances  would  the  dependants  of  a  workman 
injured  suffer  in  this  respect,  that  his  development  should  not  be  interfered  with 
until  he  was  enabled  to  support  himself  or  herself.  This  is  the  fundamental  basis 
of  workmen's  compensation  or  industrial  insurance. 

Now,  I  would  like  to  say  a  little  about  the  number  of  accidents.  The 
lowest  estimate  of  accidents  to  workmen  in  the  way  of  bodily  injury  in  the 
United  States,  where  we  will  say  the  population  was  90,000,000  when  we  made  our 
investigation  in  1910,  was  1,536,000  people  injured,  maimed  and  killed  in  one  year. 
In  the  battle  of  Gettysburg  there  were  43.500  soldiers  killed,  wounded  and 
missing  in  that  three  days'  battle,  but  you  would  have  to  have  one  of  those  every 
month  in  some  part  or  other  of  the  United  States  in  order  to  create  the  same 
havoc;  but  if  we  are  as  careful  as  Germany  is — they  have  a  million  accidents 
among  63,000,000  of  people — if  the  people  are  no  more  careful  in  the  United 
States  than  in  Germany  we  would  have  one  million  and  a  half  instead  of  1,536,000. 
Now,  if  I  can  buy  a  thousand  dollar  insurance  policy,  the  laws  of  our  State  pro- 
vide a  protection  for  that  fund,  and  prescribe  the  nature  of  the  contract  which  the 
life  insurance  company  must  make  in  order  that  they  may  be  permitted  to  come 
into  the  State  of  Ohio  and  even  write  insurance.  Now,  I  take  all  kinds  of  busi- 
ness, from  the  poorest  to  the  richest  people,  and  I  have  in  my  office  three  policies, 
where  a  woman  insured  her  mother  against  funeral  expenses  at  the  age  of  60,  and 
has  paid  25  cents  a  week  for  seventeen  and  one-half  years,  or  $230,  and  the  Western 
and  Southern  Life  Insurance  Company  of  Cincinnati  say  they  will  pay  her  in 
settlement  of  that  policy  $50.  Now,  the  State  of  Ohio,  among  other  States  of  the 
United  States  furnishes  the  workingman  a  means  whereby  by  paying  a  small 
amount  of  premium  he  can  protect  himself  or  herself  in  instances  of  that  kind 
against  a  small  competency  for  funeral  expenses  or  disability  and  old  age. 

The  careful  marshalling  of  the  facts,  and  they  are  more  fully  set  out  in 
this  brief  which  will  appear  in  your  record,  was  sufficient  to  convince  the  legislature 
of  the  State  of  Ohio  that  we  must  abandon  the  old  common  law  remedy  at  least 
in  accidents  of  bodily  injuries.  Then  came  the  question,  "What  is  your  remedy; 
what  are  you  going  to  put  in  place  of  it  ?  "'  lu  my  brief  likewise  I  have  stated 
under  five  propositions  a  brief  resume  of  what  the  act  contains,  and  I  will  pre- 
sent your  Lordship  with  a  copy  of  the  Bill,  which  the  reporter  will  be  so  kind 
as  to  insert  either  as  an  appendix  to  the  brief  or  an  introduction  to  the  brief,  just 
as  he  sees  fit.  Our  Bill  provides  in  the  first  place  that  in  case  of  death  the  workman 
shall  receive  from  $1,500  to  $3,400,  based  upon  66  2-3  per  cent,  of  the  average 
weekly  wage,  and  doctors'  bills  and  funeral  expenses  not  to  exceed  $150.  That  is  to 
say  in  no  case  is  it  less  than  $5  a  week  for  300  weeks,  and  in  no  instance  more 


316  MINUTES  OF  EVIDENCE:  No.  65 


than  $12  a  week  for  300  weeks.  There  was  a  slight  compromise,  your  Lordship. 
300  times  $12  would  be  $3,600,  but  it  was  reduced  to  $3,400  in  the  conflict  at  the 
discussions  in  the  Commission.  Now,  total  disability  runs  as  long  as  it  lasts,  and 
not  more  than  $12  a  week,  or  66  2-3  per  cent,  of  the  average  weekly  wages,  which 
generally  is  an  enormous  compensation. 

Mr.  Wegenast  :  May  I  ask,  Mr.  Boyd,  whether  the  clauses  are  limited  to  which 
this  act  applies,  with  reference  to  the  salary  that  a  man  earns? 

Mr,.  Boyd:     It  is  limited  in  the  compensation. 

Mr.  Wegexast:     Only  in  the  compensation? 

Mr.  Boyd:  That  is  right.  It  applies  to  all  employees,  including  the  em- 
ployees of  the  state,  counties,  cities,  and  school  districts  of  the  townships.  Every- 
body is  in  there  but  those  who  employ  four  or  less. 

In  partial  injuries  the  compensation  is  66  2-3  per  cent,  of  the  loss  of 
earning  power,  and  doctors'  bills  not  to  exceed  $150,  to  run  for  300  weeks,  but  in 
no  instance  more  than  $12  a  week,  nor  more  than  $3,400.  The  act  provides 
for  a  period  of  seven  days  there  shall  be  no  compensation  at  all  except  doctors' 
bills. 

Mr.  Wegexast:  May  I  ask,  Mr.  Boyd,  whether  in  limiting  the  total  amount 
of  compensation  to  $3,400  you  fix  a  period  of  time  at  which  the  payments  on  the 
basis  of  66  2-3  per  cent,  shall  cease,  or  whether  you  reduce  the  percentage  ?  What 
I  mean  is,  suppose  a  young  man  is  injured.  He.  gets  66  2-3  per  cent,  of  his  wages 
and  it  will  not  take  many  years  before  the  $3,400  is  eaten  up.  What  happens  then? 
How  do  you  work  out  that  feature  ? 

Mr.  Boyd  :  Well,  his  compensation  shall  in  no  instance,  except  in  total  dis- 
ability, be  more  than  $3,400.    It  is  paid  monthly. 

Mr.  Wegenast:     And  when  the  $3,400  is  reached  then  the  payments  end? 

Mr.  Boyd:  Yes.  Now,  as  to  the  case  of  a  lump  sum  payment,  it  is  within 
the  discretion  of  the  Board  to  say  wdiether  it  would  be  most  wise  in  a  particular 
case  that  a  part  or  all  of  this  compensation  may  be  paid  at  once — be  commuted. 
For  example  a  man  might  be  killed  or  totally  disabled  and  may  have  a  mortgage 
on  a  small  house,  and  instead  of  allowing  that  to  become  foreclosed  they  would 
commute  sufficient  of  his  compensation  to  pay  that  off.  Otherwise  he  gets  his 
compensation,  or  his  dependants  get  the  compensation,  in  monthly  payments. 

So  then  we  have  a  provision  for  partial  injuries  and  total  disability  and  death 
cases;  we  have  a  waiting  period  of  seven  days;  it  is  based  upon  66  2-3  per  cent. 
of  the  loss  of  earnings;  the  payments  are  made  monthly  and  can  be  commuted  in 
special  cases  at  the  wisdom  of  the  Board;  and  the  workman  can  not  assign  or 
transfer  his  interest  in  the  fund. 

Now  then,  we  wished  to  accomplish  first  of  all  two  things.  One  was  to  take 
tlii  i birds  of  all  this  money  that  it  had  cost  the  employers  through  liability 

insurance  ami  the  hiring  of  attorneys  to  defend  these  personal  injury  suits — we 
wanted  all  that  to  go  into  the  fund.  Then  we  wanted  all  that  the  workmen  had 
spent  in  hiring  lawyers,  that  in  these  investigations  as  you  will  see  never  is  less 
than  25  per  cent,  ami  often  50  per  cent.,  and  more,  of  what  he  gets,  to  go  to  the 
fund.  For  example  in  the  New  York  investigations,  and  in  our  investigations  in 
Cuyahoga  County,  and  in  Alleghany  County,  Pennsylvania,  it  was  shown  that  while 
"ii  the  average  aboul  6  to  1 ''  per  cent,  of  the  people  injured  got  something — take 
fur  example  the  married  persons  in  Cuyahoga  county,  42  per  cent,  only  got  some- 
thing, and  58  per  cent.  ,Lr"t  nothing;  of  the  single  men,  25  per  cent,  got  something 
and  75  per  cent.  Lr<>t  nothing — while  on  the  average  they  got  something  in  36  per 


O  1   rv 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  31 

cent,  of  the  cases,  but  it  averaged  only  $835  in  fatal  cases,  among  those  who  got 
something  in  the  36  per  cent.  Then  of  that  25  per  cent,  at  least  must  go  to  the 
lawyers,  and  there  is  the  delay  and  the  borrowing  of  money  from  Tom,  Dick  and 
Harry  until  a  settlement  of  some  kind  or  other  is  made.  So  that  summing  the 
whole  thing  up  of  that  6  to  12  per  cent,  that  get  something,  on  the  average 
it  is  one-fifth  of  what  any  man  or  any  person  would  consider,  your  Lordship,  as 
adequate  compensation  in  those  cases.  So  that  is  no  remedy  at  all.  That  is  what 
I  told  the  legislature,  and  presented  to  them  what  1  thought  was  proof  that  it  was 
no  compensation  at  all. 

Now,  first  of  all  we  desired  the  remedy  to  provide  that  all  this  waste  should 
go  into  the  fund  and  that  the  workmen  should  get  it  all.  We  had  twenty-seven 
hearings,  and  sometimes  there  were  a  thousand,  five  hundri  1.  two  hundred,  fifty 
people  present,  and  when  the  labour  leaders  read  a  paper  or  when  the  employers 
read  a  paper  everybody  joined  in.  We  did  not  have  any  experts.  We  just  invited 
everybody  to  come  in  and  tell  us  all  they  knew  about  it,  but  it  wasn't  a  preaching 
proposition,  gentlemen.  When  they  got  through  I  cross-examined  till  I  got  all  I 
thought  of  out  of  them,  and  then  the  other  members  of  the  Commission  examined, 
and  then  anybody  in  the  room,  as  this  record  will  show,  asked  any  question  he 
saw  fit  of  the  speaker  pertinent  to  the  issue,  and  so  it  was  all  threshed  out. 

The  employers  were  unanimous,  and  so  were  the  labour  leaders,  that  we  should 
get  rid  of  the  old  remedy,  and  after  we  had  got  our  act  completely  drafted 
except-  as  to  two  propositions,  every  member  of  the  Commission  voted  unanimously 
for  every  provision  in  the  act — with  as  I  say  two  exceptions.  The  labour  leaders 
did  not  want  the  employee  to  contribute.  They  did  demand  at  first  that  the  em- 
ployee should  have  the  right  to  take  the  compensation  or  sue — but  up  to  that  time 
everybody  admitted  that  an  insurance  fund  was  the  thing  to  have.  We  wanted  to 
get  rid  of  the  contention  between  the  employee  and  the  employer,  and  that  is  the 
only  way,  gentlemen,  you  can  get  it.  And  mind  you,  the  employer  is  willing  to 
pay  a  good  deal  of  money  to  get  rid  of  that  contention.  It  is  no  profit  either  to 
the  employee  to  have  the  contention.  Now  then,  I  first  demonstrated  to  my  satis- 
faction and  to  the  satisfaction  of  the  legislature,  and  finally  to  the  satisfaction 
of  the  Supreme  Court,  that  whether  you  have  an  insurance  proposition  or  not  de- 
pends on  whether  you  have  a  definite  liability  to  insure  against.  In  fire 
insurance  you  have.  You  go  out  and  determine  the  value  of  your  house;  you  deter- 
mine the  hazard;  the  circumstances  and  the  surroundings  in  which  it  is  situated, 
and  then  you  can  fix  your  premium,  and  the  owner  can  pay  his  pro  rata  share  of 
the  fund  to  insure  that  house. 

The  very  moment  you  can  determine  the  liability  under  any  industrial 
insurance  act  or  workmen's  compensation  act  then  you  can  say  the  premium  is  so 
much,  but  if  you  cannot  do  that  you  cannot  fix  any  premium  at  all.  In  New 
York  State  they  passed  an  act,  and  by  the  way  Chairman  Wainwright  wrote  me 
that  he  was  always  in  favour  of  an  insurance  act,  but  they  were  afraid  to  take  the 
stand.  I  can  produce  his  correspondence  to  prove  it.  The  New  York  Act  pro- 
vided the  workman  might  take  his  compensation  under  the  Compensation  Act,  and 
it  would  be  obligatory  upon  the  employer  to  pay  the  award  that  might  be  made 
against  him,  regardless  of  negligence  on  the  part  of  the  employer  or  employee, 
except  malicious  negligence,  or  he  might  file  his  petition  in  court,  but  the  em- 
ployer would  not  know  which  was  going  to  happen  until  the  workman  decided  to 
do  one  or  the  other.  Now,  I  contend  that  the  New  York  Supreme  Court  was  wise, 
especially  from  the  standpoint  of  protection  of  the  workmen,  in  getting  the  wisest 


318  MINUTES  OF  EVIDENCE:  No.  65 


remedy  at  the  start.  It  would  be  a  terrible  thing  to  inaugurate  in  the  State  of 
New  York  with  ten  million  people  and  with  its  enormous  number  of  workmen,  a 
wron?  scheme,  and  then  try  to  shift  from  the  wrong  scheme  to  the  right  scheme. 

As  to  the  other  proposition,  why  should  the  employee  contribute?  In 
the  first  place  the  workingmen  had  agreed  on  our  Commission  that  total  disability 
should  onlv  run  for  300  weeks.  The  employers  of  the  State  of  Ohio  were  un- 
animously of  the  opinion  that  at  the  start  at  any  rate  they  wanted  the  employee 
to  contribute,  and  to  be  a  party  to  the  fund,  even  though  it  be  a  very  small  amount. 
So  we  finally  decided  to  make  him  a  party  to  the  fund,  and  they  insisted  upon  his 
paying  25  per  cent.  Then  I  said  to  them  you  must  then  make  the  total  disability 
run  as  long  as  it  will  last,  and  after  weeks  of  contention  about  that  particular 
point  they  said  all  right.  Of  course  it  was  left  for  the  legislature  to  say  whether 
H  .-hould  be  25  per  cent,  or  something  less. 

Now  then,  under  the  German  Act,  your  Lordship  will  understand  the  sick 
insurance  runs  for  thirteen  weeks,  and  therefore  it  is  sickness  whether  it  is  an 
injury  or  sickness.  After  the  thirteen  weeks  it  is  an  accident.  During  the 
thirteen  weeks  the  employee  contributes  two-thirds  of  the  sick  fund,  and  the  em- 
ployer one-third.  After  the  thirteen  weeks  the  employer  contributes  it  all.  In  the  old 
age  insurance  the  workmen  contribute  half,  the  employers  half,  and  the  State  fifty 
marks  in  each  individual  case  insured.  I  understand,  your  Lordship,  that 
your  act  will  consider  first  of  all  personal  injuries,  not  sickness  nor  old  age.  That 
is  the  way  ours  is  drawn.  No  matter  how  desirous  you  might  be  to  inaugurate 
sickness  and  old  age  insurance  it  would  be  practically  an  impossibility  to  launch 
it  all  at  one  time,  and  even  Germany  did  not  attempt  it,  where  they  have  got  every- 
thing to  facilitate  it,  where  everything  is  bookkeeping.  Why,  if  I  were  in  Berlin 
all  I  would  have  to  do  would  be  to  go  right  down  to  the  police  office,  if  you  were 
a  workman  and  I  wanted  to  find  you,  and  find  you  in  twelve  hours.  So  even  with 
their  bookkeeping  scheme  of  running  a  Government  they  did  not  attempt  any- 
thing but  accident  insurance  at  the  start.  Then  in  a  couple  of  years  they  put  in  the 
sickness,  and  a  couple  of  years  more  the  old  age  insurance.  It  was  longer  than  that 
before  they  put  in  the  old  age  insurance,  but  they  put  in  the  agricultural  labourers 
about  four  years  after  the  accident  insurance.  Figure  out  the  operation  of  the- 
German  Act  and  you  will  find  that  the  workmen  contribute  to  the  bodily  injury 
insurance— that  is  to  say  personal  injury  insurance — about  16  2-3  per  cent.,  or 
about  one-seventh  of  the  fund. 

The  Commissioner  :     That  is  by  these  thirteen  weeks  ? 

Mi:.  Boyd:     Yes,  some  of  the  injuries  being  in  the  thirteen  weeks. 

Mr.  Bancroft:     But  there  is  no  direct  contribution  in  the  legislation? 

Fin:  Commissioner:     So  far  as  the  employer  is  concerned  he  pays  it  all. 

Mi:.  Boyd:  But  for  those  thirteen  weeks  the  employer  does  not  pay  it  all. 
Supposing  a  man  gets  his  leg  cut  off  it  is  sickness  for  thirteen  weeks,  or  in  the 

of  occupational  disease,  or  if  he  was  really  sick  or  got  sick  while  he  was  em- 
ployed, it  would  be  sickness.  So  there  is  some  bodily  injury  compensation  in  that 
thirteen  weeks,  and  figuring  that  up  the  workmen  will  pay  under  the  German  Act 
ahout    L6  or  17  per  cent. 

In   Ohio  the  legislature  drove  it  down  to  10  per  cent.     The  employer  pays 

»"  per  cent.,  and  he  is  authorized  by  the  act  to  deduct  10  per  cent,  of  what  he 

pays  from  the  pay-roll,  and  the  Stair  pays  the  entire  cost  of  administration.    That 

is  not  so  in  Germany,  bul  I  thi  svould  be  justified  in  thai  on  account  of  the 

enormous  expense  which  the  State  of  Ohio  is  now  out   to.     Any  man  can  file  a 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  319 

personal  injury  suit  and  he  does  not  have  to  put  up  any  security  for  costs.  He  can 
have  a  jury  for  four  or  five  days  or  a  week,  and  lose  his  case,  and  it  does  not  cost 
him  anything  in  court  costs,  lie  can  come  in  and  make  an  affidavit  and  say  he 
cannot  pay  it,  that  he  has  not  more  than  $500,  and  flic  Slate  has  to  pay  it.  There 
are  the  summonses  of  witnesses,  sheriff's  fees,  and  the  clerk,  and  the  juryman,  and 
the  judge.  Why.  the  State  will  be  making  money  by  this  scheme.  The  State 
must  spend  $300,000  or  $400,000  or  $500,000  in  that  kind  of  expenses,  and  tho 
estimate  of  the  first  annual  expenditure  under  this  Act  is  $100,000.  I  think  it  will 
be  more  than  that. 

1  think  that  other  points  can  be  brought  out  perhaps  better  by  your  asking 
the  questions,  or  some  gentleman  present  asking  questions. 

However,  I  will  direct  my  attention  for  a  few  minutes  to  some  principles  of 
jurisprudence.  I  understand,  your  Lordship,  that  there  is  no  question  here  as 
that  an  act  might  be  unconstitutional  if  passed  by  the  Province  of  Ontario,  or  by 
the  Dominion  Parliament.  There  is,  I  believe,  what  is  called  a  veto  power  residing 
in  the  Dominion  Parliament  and  also  in  His  Majesty  the  King,  which  is  seldom 
used. 

Now,  gentlemen,  it  only  required  industry  and  honesty  and  a  reasonable 
amount  of  brains  to  make  the  investigation  of  facts  and  bring  them  together,  but 
when  it  came  to  the  questions  of  legal  justification  of  abandonment  of  the  old  act, 
where  a  great  many  of  the  legal  profession  were  interested  in  making  a  living  by 
defending  personal  injury  suits,  and  where  we  had  in  the  Judiciary  Committee 
often  fifteen  liability  insurance  companies  lined  up  around  the  wall  trying  to 
make  all  the  trouble  they  could  for  us  when  getting  the  Judiciary  Committee  to 
O.K.  our  Bill,  and  they  had  clever  attorneys  to  look  after  their  interests,  that  was 
the  hard  part  of  the  proposition. 

I  wish  to  direct  your  Lordship's  attention  to  a  few  basal  decisions  which  I 
think  are  equally  applicable  in  the  Province  of  Ontario.  In  Munn  v.  Illinois, 
94  U.  S.  Supreme  Court  Reports — that  case  I  regard  as  the  ablest  case  ever  written 
by  any  judge  of  our  Supreme  Court,  notwithstanding  the  opinions  written  by 
Chief  Justice  Marshall.  I  may  be  mistaken.  That  was  a  case  in  which  the 
legislature  sought  to  limit  the  amount  that  grain  elevators  might  charge.  It 
fixed  a  maximum  rate.  That  was  in  1876.  At  that  time  Illinois  became  a  great 
grain  producing  country,  so  the  legislature,  in  order  to  limit  the  abuses,  passed 
a  law.  They  had  no  corn  cribs  to  store  the  grain,  and  possibly  the  farmer  might 
produce  ten  thousand  bushels  of  grain  and  might  want  to  haul  it  in  at  once,  and 
everybody  else  might  want  to  do  the  same  thing,  and  when  it  came  to  a  critical 
time  in  the  fall  they  began  to  jockey  the  rates  so  high  to  make  all  the  money  they 
could  out  of  the  public,  and  the  legislature  said.  We  will  limit  that,  we  will  fix  a 
limit  beyond  which  you  cannot  go  in  charging  rates  for  storing  grain.  Now,  in  that 
case  Chief  Justice  Waite  goes  back  into  English  history  and  refers  to  English  decis- 
ions. You  will  get  that  in  the  records,  showing  that  when  a  man  uses  his  property  in 
such  a  way  as  to  create  a  public  interest  then  it  is  within  the  police  power  of  the  State 
to  regulate  the  matter.  Now,  in  the  economic  evolution  of  our  country,  that  is  the 
first  instance  of  the  extraordinary  use  of  the  police  power  in  that  respect.  Then 
we  come  to  the  development  of  the  mining  business  in  Colorado  and  Idaho,  when 
the  handling  of  the  mines  was  done  by  smelters,  and  Idaho  passed  an  act  limiting 
the  hours  they  might  require  a  man  to  work,  even  voluntarily.  It 
simply  prohibited  smelters  from  employing  any  man,  whether  he  wanted  to  work  or 
not,  more  than  eight  hours,  or  underground  in  the  mines  more  than  eight  hours, 


MINUTES  OF  EVIDENCE:  No.  65 


and  placed  not  only  a  money  fine,  but  a  penal  sentence,  and  an  employer  in  this 
case  was  sentenced  to  one  or  two  years,  and  the  Supreme  Court  sustained  the  act. 
There  is  another  feature  of  the  economic  evolution  of  our  country,  and  it  is  true 
of  this  country  of  Canada  as  well  as  our  own,  as  is  also  the  grain  proposition. 
Then  comes  the  third  economic  evolution  as  shown  by  the  evolution  of  our  prin- 
ciples of  jurisprudence.  That  was  when  there  were  the  great  discoveries  of  oil 
and  gas.  There  was  the  Ohio  Oil  Company  v.  Indiana,  177  IT.  S.,  and  the  Idaho 
case  is  Gordon  v.  Hardy,  169  U.  S.  In  the  Ohio  Oil  Company  v.  Indiana,  the 
court  first  laid  down  a  proposition  that  it  was  the  law  of  Indiana  that  when  the 
owner  of  the  land  drilled  a  hole  and  struck  gas  or  struck  oil,  the  oil  or  gas  was  not 
bis  property,  the  title  was  not  in  him  until  he  reduced  it  to  his  possession.  If 
that  man  who  owns  that  land  digs  a  hole  and  strikes  gas  and  allows  it  to  escape, 
then  the  act  says,  We  will  fine  you  so  much  if  you  do  that,  because  the  gas  has 
the  natural  capacity  of  moving  itself  from  place  to  place,  so  that  this  gas  that  he 
allows  to  go  to  waste  might  come  from  under  his  neighbour's  land,  but  so  long  as 
he  uses  it  and  reduces  it  to  his  possession  and  sells  it  to  the  public  then  it  is  his 
property,  but  when  he  did  not  it  was  an  abuse  of  the  public's  right  by  his  not 
doing  so.  Now,  then,  we  have  first  an  exhaustive  definition  of  police  power  for 
the  regulation  of  the  manner  in  which  a  man  may  conduct  his  business,  shown 
by  the  elevator  case,  the  smelter  case  and  the  oil  case.  Then  comes  the  Oklahoma 
Bank  case,  and  I  would  only  touch  upon  one  feature  that  may  be  of  interest  here, 
and  that  is  the  Oklahoma  Act  provided  that  every  bank  should  be  required  to  put 
one  per  cent,  of  its  deposits  into  a  fund,  that  fund  to  be  administered  by  a  Board 
for  a  guarantee  that  every  depositor  of  a  bank,  in  case  the  bank  fails,  should  be 
paid  in  full,  and  authorized  that  Board  to  take  possession  of  the  property  of  the 
bank  and  take  the  money  from  the  fund  and  pay  off  the  depositors  and  settle  up 
the  a  hairs  of  the  bank,  and  put  the  money  back  into  the  fund. 

For    our    purposes    there    were    three    other    interesting    lines    of    cases    on 
which  this  act  is  based.  One  of  them,  your  Lordship,  I  think  you  must  have  here, 
what    is    called    the    sheep-dog    law.     In    all    the    Staites    of    the    United    States 
where  sheep  are  raised  they  have  a  law  where  every  man  that  owns  a  dog  must 
pay  a  tax  of  $1  or  $2  into  a  fund,  and  in  case  sheep  are  killed  they  send  out 
appraisers,  and  the  appraisers  issue  an  order  and  pay  the  damages  out  of  this  fund. 
Now,   that   involves  the   same   principle   as   the   administration   of   this   industrial 
insurance  fund.     Then  there  is  another  line  of  cases  such  as  in  Illinois  and  "Wis- 
consin, where  a  fire  insurance  company  coming  into  Illinois  and  doing  business, 
in  Chicago,  for  instance,  when  he  writes  a  policy  he  must  take  a  part  of  that  pre- 
mium and  pay  it  into  a  fund,  and  the  fund  is  to  be  used  for  the  compensation  of 
the  dependants  of  firemen  injured  or  killed  in  performing  their  duties  as  firemen. 
Then  there  i-  another  very  interesting  line  of  cases  in  connection  with  the  whiskey 
traffic.     That  is  a  Minnesota  case,  Minnesota  v.  Cassidy,  22  Minn.,  where  the  State 
requires  that  every  man  going  into  the  saloon  business  should  pay  a  certain  license. 
Ut'T  lie  lias  taken  oul  his  license  and  paid  for  his  license,  they  say.  "you  must  pay 
$10  more/'  ami  ibis  goes  into  a   fund  to  be  administered  by  the  Board  to  build  a 
-aniiarium   ami    furnish   such  medical   attendance  as  necessary  to  rejuvenate  such 
persons  as  have  become  confirmed  drunkards. 

Now,  your  Lordship,  I  think  1  have  given  you  a  resume. of  itho  investigations 
which  we  made  in  connection  with  the  Ohio  Act,  and  T  think  possibly  any  further 
point-  could  be  besl  broughl  out  by  asking  questions. 

Mi;.  \\'p;i  \wr:     ]  have  nothing  in  particular  to  ask.  but  T  thought  I  might 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  321 

ask  Mr.  Boyd  whether  the  question  was  considered  by  them  as  to  what  form  the 
contribution  by  the  workmen  should  take.  That  is,  whether  it  should  be  a  money 
contribution,  or  take  the  form  of  a  waiting  period  during  which  the  burden  of  com- 
pensation would  rest  upon  the  workmen. 

Mr.  Boyd:  Both.  There  was  no  opposition  on  the  part  of  the  workmen 
that  a  reasonable  wailing  period  should  be  provided  for.  The  act  provides  for  a 
seven  days'  waiting  period,  and  they  all  agreed  that  that  was  a  reasonable  provision. 
There  was  no  objection  to  that  whatsoever.  For  instance,  page  2  of  that  report 
shows  that.  In  addition  to  that,  for  the  purpose  of  having  the  workmen  interested 
in  it  and  watching  other  workmen  so  that  they  may  be  more  careful,  and  may  report 
on  them  if  they  weren't  careful  and  making  the  fund  cost  more  (for  the  more  acci- 
dents the  more  the  fund  would  cost),  the  workmen  ought  to  make  some  kind  of 
contribution.  That  is  the  line  of  argument  that  seemed  to  prevail.  Our  act,  for 
example,  provides  that  the  actuary  specifies  the  employment  and  fixes  the  premium. 
The  premium  is  fixed  by  the  hazard,  and  the  amount  of  the  premium  will  be  deter- 
mined by  the  amount  of  pay-roll.  When  an  employer  has  paid  his  premium  he 
takes  up  the  pay-roll  and  deducts  ten  per  cent,  of  that  from  the  pay-roll,  pro  rating 
to  the  amount  of  wages  that  each  individual  had  earned. 

Mr.  Wegenast:     Every  three  months,  is  it? 

Mr.  Boyd:     Every  six  months,  I  think. 

Mr.  Wegenast  :  What  I  was  thinking  of,  Mr.  Boyd,  was  not  a  waiting  period 
of  one  week,  because  a  period  of  one  or  two  weeks  is  recognized  as  a  necessity  in  all 
systems,  but  a  longer  waiting  period  of  thirteen  weeks,  as  it  is  under  the  German 
system,  or  say  four  weeks  as  it  is  under  some  other  systems.  Was  the  question  con- 
sidered whether  the  workmen's  contribution  should  take  that  form  rather  than  the 
money  contribution  ? 

Me.  Boyd:  That  was  discussed  to  a  limited  extent.  For  example,  the  per- 
centage of  accidents  which  lasts  only  a  week  constitutes  the  enormous  total  sum  of 
49  per  cent  of  all  the  accidents.  Take  Germany's  millions  of  workers,  and  the 
accidents  that  occurred  in  year  1908,  19  per  cent,  of  them  did  not  last  over  seven 
davs. 

The  Commissioner:  But  what  Mr.  Wegenast  asked  would  not  be  applicable 
to  your  act  at  all.  You  have  no  invalidity  insurance  as  they  have  in  Germany, 
which  provides  for  that  thirteen  weeks.  The  sickness  fund  provides  for  the  thir- 
teen weeks,  half  contributed  by  the  employer  and  half  by  the  employee. 

Mr.  Boyd:     Yes. 

The  Commissioner:  So  that  that  feature  not  being  in  your  act,  it  would 
follow  that  that  contribution  would  not  be  applicable  at  all. 

Mr.  AVegenast:  This  is  the  principle  upon  which  Mr.  Chamberlain  put  it, 
that  the  workmen  could  be  expected  to  take  care  of  this.  He  is  not  presumed  to  be 
entirely  indigent,  but  he  could  be  expected  to  take  care  of  that  period,  whatever  it 
might  be,  himself,  and  thus  bear  a  portion  of  the  cost  of  the  compensation. 

Mr.  Boyd:  I  was  just  coming  up  to  the  point.  Suppose  you  extend  that 
waiting  period  two  weeks  instead  of  one  week,  look  at  the  enormous  number  of 
accidents  that  that  would  cover.  The  fundamental  principle  of  the  waiting  period 
is  not  for  the  purpose  of  depriving  workmen  of  compensation,  but  to  be  sure  and 
have  a  reasonable  waiting  period  so  that  the  abuses  of  the  inauguration  of  the 
act  would  not  defeat  the  act. 

Mr.  Bancroft  :     To  stop  malingering. 

Mr.  Boyd:  That  is  for  the  workman's  own  protection.  The  workman  has 
21   L. 


MINUTES  OF  EVIDENCE:  No.  65 

found  that  out  in  a  century  of  operation  of  mutual  associations  of  various  kinds, 
sickness  and  accidents  and  all  kinds. 

The  Commissioner  :  Did  you  figure  out,  Mr.  Boyd,  what  that  week  of  wait- 
ing would  mean,  what  contribution  from  the  workmen  that  would  involve,  because 
that  would  represent  so  much  money.  Is  that  not  a  contribution  by  the  workmen? 
Me.  Boyd:  I  had  that  at  one  time  precisely.  It  figures  49  per  cent,  of  the 
accidents.  Your  Lordship  wishes  to  know  what  the  monetary  consideration  would 
be? 

The  Commissioner  :     Yes. 

Mr.  Boyd  :  I  cannot  answer  that  precisely.  I  can  give  you  some  very  close 
idea  with  regard  to  the  thirteen  weeks,  and  that  will  shape  it  a  little.  I  can  give 
you  the  precise  figures  for  the  thirteen  weeks.  Now,  take  the  cost  of  the  German 
Act  for  twenty  years  ending  1904,  for  sick  insurance,  accident  insurance  and  old 
age  insurance.  "  That  total  cost  was  $803,000,000.  Of  that  $803,000,000, 
$555,750,000  was  paid  on  account  of  sick  insurance.  First  divide  it  up  that  way. 
Then  the  accident  insurance  which  runs  after  that  thirteen  weeks  was  $232,750,000, 
and  the  old  age  insurance  was  $13,500,000.  Now,  going  back,  ithe  employees  paid, 
on  account  of  paying  two-thirds  of  the  sick  insurance  and  half  of  the  old  age 
insurance,  which  would  be  only  about  $6,000,000,  $424,500,000.  Now,  you  deduct 
the  $6,000,000  that  he  paid  in  the  old  age,  and  you  have  $418,000,000  that  he  paid 
for  sickness  insurance  by  paying  the  two-thirds  of  the  thirteen  weeks. 

Mr.  Wegenast:  That  would  include,  however,  Mr.  Boyd,  real  sickness,  as  well 
as  occupational  diseases  and  accidents? 

Me.  Boyd:     Yes,  it  includes  everything. 
Mr.  Wegenast:     You  would  have  to  divide  it. 

Mr.  Boyd  :  I  admit  that  does  not  quite  reach  it.  His  Lordship  wants  to 
know  what  the  monetary  consideration  during  one  week  would  represent? 

The  Commissioner  :  Yes.  It  seems  to  me  it  would  be  a  pretty  large  contri- 
bution. I  should  think  it  would  not  be  unfair  to  assume  that  75  per  cent,  of  the 
accidents  were  real  accidents  and  not  malingering.  Supposing  you  allow  25  per 
cent  for  malingering. 

.Mr.  Boyd:  I  can  give  you  exact  figures  on  that.  It  is  a  little  more  than 
one  per  cent,  and  a  little  less  than  two  per  cent. 

Mi;.  Bancroft:     I  think  that  justifies  what  we  have  been  claiming. 
The  Commissioner:     Then  does  that  not  mean  the  workmen  contribute  that 
one  week? 

Mu.  Boyd:     Yes,  there  is  no  question  of  that. 
The  Commissioner:     Is  that  not  a  large  contribution? 
Mr.  Boyd:     Yes,  it  is  a  large  contribution. 

Mr.  Bancroft:  In  the  Ohio  legislation,  Mr.  Boyd,  there  is  a  waiting  time 
of  seven  days? 

Mi:.  Boyd:     Yes. 

If  the  period  of  injury  continues  say  into  three  weeks  he  is 
the  firsl  day  of  the  injury?     The  compensation  is  retroactive  to  the  first 
day  of  the  injury? 

Mi;.  Boyd:     That  is  my  memory  of  it. 

Mit.  Wegenast:     So  it  would  not  be  a  seven  days'  waiting  in  all  cases? 
Mi;.  Bancroft:    Where  it  was  less  than  a  week  it  would  be. 
Mi;.  Boyd:     Now.  if  mi  accident  lasts  only  two  days  it  costs  as  much  to  the 
State  as  one  thai  would  lasl  for  a  long  period. 
Mu.  Bruce:     Yov  mean  for  i ho  procedure? 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  323 

Mr.  Boyd  :     Yes. 

Mr.  Bancroft:     You  are  familiar  with  the  German  system? 

Mr.  Boyd:     Yes. 

Mr.  Bancroft  :  You  remember  the  first  piece  of  legislation  was  the  sickness 
and  death  insurance. 

Mr.  Boyd:  The  so-called  fundamental  law  of  July  6th,  1884,  for  industry, 
transport  trades,  telegraph,  army  and  navy;  the  "Agricultural  Law"  of  May  5th, 
1886,  for  agriculture  and  forestry;  the  "Building  Law,"  July  11th,  1887,  for 
building  trades  so  far  not  insured;  the  "Marine  Law,"  July  13th.  1887,  for  navi- 
gation. The  Bill  for  sick  insurance  passed  on  May  31st,  1883,  with  a  majority  of 
117  votes. 

Mr.  Bancroft:  That  was  the  first  attention  that  Germany  paid  practically 
to  social  insurance,  when  they  introduced  the  sick  insurance? 

Mr.  Boyd:     That  thirteen  weeks? 

Mr.  Bancroft  :  That  thirteen  weeks  was  placed,  in  the  legislation.  The 
sick  insurance  only  covered  about  13  weeks  of  illness  at  that  time.  After  that  they 
passed  another  piece  of  legislation  for  invalidity  and  old  age,  which  was  interwoven 
into  the  sick  insurance,  and  the  third  piece  of  legislation  was  workmen's  com- 
pensation. 

Mr.  Boyd  :     You  mean  the  personal  injuries  ? 

Mr.  Bancroft:  Yes,  accident  insurance.  That  was  the  last  piece  of  legis- 
lation they  passed,  and  they  could  not  change  the  compensation  legislation  without 
interfering  with  the  whole  system  of  social  insurance  from  the  first  day  of  a  man's 
injuries.  They  had  to  interweave  it  into  the  system  of  social  insurance,  and  they 
recognized  the  theory  in  workmen's  compensation  that  the  workmen  should  not 
directly  contribute  because  the  burden  was  on  the  employer.  It  was  only  because  of 
the  fact  that  the  sick  insurance  was  already  in  existence  and  was  working  well  that 
they  interwove  the  other  piece  of  legislation  into  that,  and  put  in  that  thirteen 
weeks. 

Mr.  Boyd  :  Of  course  that  thirteen  weeks  is  based  upon  the  fact,  as  I  stated 
in  the  beginning,  that  they  had  mutual  insurance  associations  for  fifty  or  sixty 
years  before  that.     So  they  simply  brought  that  under  a  national  Bill. 

Mr.  Bancroft  :  What  I  wanted  to  bring  out  particularly  was  that  a  direct 
contribution  to  workmen's  compensation  has  not  been  recognized  in  Germany.  It 
is  only  a  matter  of  accident  that  the  thirteen  weeks  was  interwoven  into  the  legis- 
lation, and  then  experts  assume  that  thirteen  weeks  is  the  contribution  of  the 
workmen  to  workmen's  compensation.  In  the  legislation  the  whole  burden  is 
borne  by  the  employer  by  a  tax  upon  his  industry. 

Mr.  Boyd  :  You  can  scarcely  put  it  that  way.  The  actual  fact  is  that  the 
Bill  for  sick  insurance  required  the  employees  to  pay  two-thirds  and  the  employers 
one-third,  and  therefore  it  should  be  treated  as  sickness  up  to  thirteen  weeks.  Now, 
in  1854  the  Prussian  Bill  provided  that  the  employers  contribute  half  or  contribute 
as  much  as  the  employees  to  the  funds  of  associations  whose  members  were  their 
employees.  So  that  German  law  recognizes  the  fact  that  they  have  made  the 
workmen  contribute. 

Mr.  Bancroft:  But  the  sentiment  has  changed.  In  Europe  now.  I  think 
there  are  only  two  acts  where -the  workmen  contribute,  one  is  Switzerland  and  the 
other  Austria,  and  the  third  act  is  the  State  of  Ohio. 

Mr.  Boyd  :     In  the  German  Act  he  contributes. 

Mr.  Bancroft;     Not  directly. 


MINUTES  OF  EVIDENCE:  No.  65 


Commissioner  :     "What  difference  does  it  make  whether  it  is  directly  or 

indirectly  ? 

Mr.  Boyd:  It  is  directly  in  the  German  Act.    He  pays  two-thirds  of  the  cost 

of  that  sick  insurance. 

Mr.  Bancroft:  Only  on  an  estimate.  There  are  52,000,000  workers  in 
Europe  who  come  under  compensation  legislation  practically,  who  do  not  contribute. 
Why,  Mr.  Boyd,  the  argument  that  has  been  used  here  about  Mr.  Chamberlain, 
Mr.  Chamberlain's  idea  on  the  subject  had  he  been  interested  in  the  matter  to-day 
would  have  undergone  a  complete  change.  His  Compensation  Bill  has  been  change'd 
completely  twice  since  he  gave  vent  to  those  opinions,  and  with  the  consent  of  his 
own  party,  his  own  people. 

The  Commissioner:  We  are  getting  away  from  the  point.  Mr.  Bancroft 
is  right  that  on  the  face  of  this  insurance  act  there  is  no  direct  contribution. 
There  is  no  certain  percentage  payable  on  the  face  of  the  German  Act,  but  by 
reason  of  the  contribution  to  the  sick  insurance  under  the  provisions  of  the  other 
act  he  does  contribute  directly. 

Mr.  Boyd:  I  see  the  gentleman's  point  now,  that  there  is  no  specific  direct 
contribution  with  reference  to  the  personal  injury  fund,  but  indirectly  he  does. 

Mr.  'Wegenast:  And  consequently  your  act  is  reactionary  in  its  tendency. 
It  goes  back  to  the  principle  which  Mr.  Bancroft  thinks  has  been  abandoned.  That 
is  the  workmen  contribute  to  the  workmen's  insurance. 

Mr.  Bancroft:  We  say  the  evidence  is  all  to  the  contrary,  the  world  wide 
evidence.     Is  there  any  other  act  in  the  States  where  they  contribute,  Mr.  Boyd? 

Mr.  Wegenast:  Mr.  Bancroft  considers  your  act  very  out  of  date  in  that 
particular  feature. 

Mr.  Bancroft  :  No,  I  protest  against  Mr.  Wegenast  expressing  my  opinions. 
The  workers  do  not  consider  the  Ohio  Act  any  such  thing. 

The  Commissioner:  Well,  I  suppose  there  is  no  doubt  about  this,  if  the 
workman  contributes  a  percentage  to  the  sickness  fund  and  he  gets  nothing  during 
the  thirteen  weeks  if  he  meets  with  an  accident,  he  does  directly  contribute  to  the 
accident,  and  that  he  pays  into  that  fund  in  the  case  of  an  accident,  as  far  as  it 
is  due  to  an  accident. 

Mr.  Boyd:     Yes,  your  Lordship. 

Now.  Mr.  Bancroft,  of  course  the  Ohio  Act  is  the  first  Industrial  Insurance 
Act  ever  brought  into  effect  in  English  history.  There  is  no  question  about  that. 
The  Chamberlain  Act  is  not;  there  is  not  any  insurance  fund,  and  there  is  not  any 
absolute  guarantee  that  the  employer  will  pay  the  award  when  it  is  made.  They 
hope  he  will  insure.  , 

Now,  the  Washington  Act  defines  47  classes  of  hazardous  employments,  and 

repeal    the    common    law    remedy    as    affecting    those    47    different 

s  of  employment.     We  do  not  make  any  exception.     I  was  determined  to  have 

the  employees  of  the  Slate  Penitentiary,  and  the  County  kand  School  districts  and 

dry  goods  stores  given  the  same  right  to  be  in  as  anybody  else. 

Mr.  Bancroft:     You  are  right. 

Mr.  Boyd:     There  may  not  be  as  many  injured  per  thousand  in  those  different 
employments,  but  when  a  man  is  killed  and  the  children  are  left  it  is  just  as  bad 
,f  ''  *as  '"  ;|  railroad  accident,  or  any  other  accident.     His  rate  is  less,  and  the 
liability  should  be  distributed  just  the  same. 

I    almost   forgo!    this,   1ml    1    want    to  point   out   thai    there   are   some   very 

deep  economic  problems  here.     We  would  have  to  spend  a  day  talking  about  a 

ogle  proposition   to  do   11    justice.     Will   yon   explain  to  me  why  alf  the  New 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  325 

England  employers,  every  last  one  of  them,  opposed  the  employees  contributing? 
They  would  not  have  them  in.  They  would  have  given  anything  to  have  thoni  out. 
Then  every  one  of  the  Ohio  employers  wanted  them  in. 

The  Commissioner:     That  is  the  cussedness  of  human  nature. 

Mr.  Boyd:  Well,  it  would  be  pretty  hard  for  a  legislative  agent  to  reconcile 
those  two  things. 

Mr.  Bancroft:     I  suppose  the  New  England  people  recognized  the  fact,  and 

I  think  you  mentioned  it  earlier,  that  if  the  workmen  did  not  contribute  that  the 

period  of  payment  was  only  going  to  continue  over  300  weeks,  whereas  the  other 

■  consented   that    the   payments   should   continue   all   a   man's    days,   provided    he 

contributed. 

Mr.  Boyd:  You  see,  Mr.  Bancroft,  we  were  in  this  position.  We  had  to  work 
night  and  day.  I  had  to  work  nights  and  days  and  Sundays,  for  this  reason,  that 
we  were  having  a  Constitutional  Convention  which  began  the  first  of  this  month  we 
will  say.  Then  if  you  read  these  public  hearings  you  will  see  a  great  number  of 
lawyers,  some  of  them  with  a  big  personal  injury  business,  were  making  a  big 
fight  over  the  high  constitutional  passes  that  we  would  have  to  get  over.  I  told 
them  we  weren't  looking  for  the  highest  passes,  but  the  lowest,  and  as  a  dis- 
tinguished gentleman  said,  "I  know  a  great  many  lawyers  who  can  tell  me  what  I 
can't  do,  but  I  want  the  lawyer  to  come  to  me  and  tell  me  what  I  can  do."  Now, 
I  put  that  proposition.  They  had  a  conference  in  Springfield,  Ohio,  and  they 
invited  me  over  there  on  this  final  proposition  as  to  whether  the  employees  should 
contribute  or  not.  After  they  got  warmed  up  on  it  the  Springfield  people  had  a 
bunch  of  figures  showing  they  ought  to  contribute  25  per  cent,  and  the  employers' 
and  the  Cleveland  manufacturers'  figures  showed  he  ought  to  contribute  50  per  cent. 
Then  I  wanted  to  know  why  the  New  England  employers  didn't  wrant  him  in  at  all. 
Now,  in  order  to  get  a  Bill  before  the  House  so  that  in  case  there  were  any  of  these 
constitutional  difficulties  we  would  have  the  workmen  and  the  employers  together, 
and  the  State  would  have  a  Constitutional  Convention  to  rectify  it,  and  everything 
would  have  to  be  done  to  get  the  Bill  out  in  the  best  shape  it  could  be  gotten  out, 
so  I  finally  conceded  he  should  contribute  25  per  cent.  I  advised  them,  however, 
to  limit  it  to  16  per  cent,  and  if  they  had  done  that  they  would  have  got  it  16  per 
cent.,  but  they  asked  too  much  in  the  opinion  of  the  legislature,  and  got  too  little. 
Then  we  made  them  give  us  total  disability  as  long  as  it  lasted,  and  that  is  enormous 
compensation.  Now,  in  the  Washington  Act  all  the  compensations  are  limited  to 
$4,000;  none  of  them  exceed  $4,000.  Just  think  of  it.  A  man  earns  $20  a  week, 
and  two-thirds  of  $20  would  be  $13  and  something.    Then  the  limit  is  $12  a  week. 

Mr.  Bancroft:     Yes. 

Mr.  Boyd:  Not  for  300  weeks,  but  for  as  long  as  he  lives.  The  employers 
are  willing  to  stand  that  if  the  workmen  contribute  something.  They  were  con- 
scientious  about  it.  There  is  no  piece  of  trickery  about  it.  There  is  none  of  this 
Macnamara  business  about  it.  They  were  conscientious  about  it  and  that  was  the 
concession  they  made,  total  disability  as  long  as  it  lasted,  as  long  as  the  workmen 
contributed  something  or  other,  on  the  theory  that  two  hundred  workmen  as  against 
one  employer  watching  the  fund  would  be  of  great  value  in  the  protection  of  the 
fund. 

Now,  mark  you,  don't  you  be  too  optimistic  about  the  abuses  of  the  fund. 
There  will  be  much  more  than  you  have  any  idea  of,  and  that  in  the  end  will  hurt 
nobody  but  the  workmen,  because  the  employers  will  all  be  in  the  same  position,  and 
I  contend  they  will  be  able  to  charge  it  up  to  the  cost  of  production.  The  same 
old  arguments  were  made  against  import  charges  against  the  goods  bought  abroad. 


326 


MINUTES  OF  EVIDENCE:  No.  65 


I  remember  in  one  political  campaign  when  I  was  a  youngster  my  nncles  were  all 
Republicans,  and  they  all  contended  that  the  exporter  had  to  pay  that  tax,  and 
seriously  contended  it;  then  they  got  round  to  contending  that  the  importer  had  to 
pay  it  ultimately,  and  now  they  all  concede  that  the  consumer  pays  it. 

Mr.  Bancroft:     Particularly  the  consumer. 

Mr.  Boyd:  Now,  my  position  I  think  on  the  whole,  under  conditions  there, 
is  it  would  be  best  for  the  workmen  to  contribute  where  those  compensations  are 
large,  but  mind  you  your  socialistic  scholars  do  not  contend  that  if  the  workmen 
ould  pay  the  entire  cost  of  the  fund  that  it  would  ultimately  reduce  his  wages. 
They  claim  his  wages  would  rise  by  that  amount  in  a  period  of  two.  three,  four  or 
five  years.     It  is  the  consumer  that  has  got  to  pay  it. 

M  r.  Baxcroet  :  Isn't  that  very  fact  breeding  a  whole  lot  of  trouble  in 
industry,  the  adjustment  of  that  payment  afterwards.  There  is  a  fundamental 
law  that  the  workman  must  have  the  amount  given  to  him  that  will  give  him  an 
existence. 

Mr.  Boyd:  There  is  no  question  about  that.  The  average  workingman 
does  not  require  much  discussion  to  demonstrate  that  the  average  workingman  in 
order  to  be  reasonably  efficient  must  have  a  reasonable  subsistence.  Now,  the 
workingman  who  is  more  prudent  than  the  average  workingman  will  accumulate 
some  capital,  and  the  man  that  is  less  prudent  than  the  average  workingman  never 
does  and  never  can,  unfortunately. 

Mr.  Harris  :  With  regard  to  the  workmen  contributing  I  understand  the 
point  Mr.  Wegenast  was  getting  at  was  whether  it  would  be  better,  if  he  con- 
tributed at  all,  to  contribute  in  money  or  contribute  by  a  longer  waiting  period. 

Mr.  Boyd  :     We  will  put  it  in  another  way. 

Mr.  Harris  :  In  a  probationary  period  you  only  penalize  the  man  with  the 
accident,  and  in  taking  money  weekly  or  monthly,  or  whatever  it  may  be  from  all 
the  workingmen,  you  penalize  even  the  careful  man. 

Mr.  Boyd:  Well,  of  course  he  is  paying  an  insurance.  Under  the  Ohio  Act 
where  a  man  is  insured  against  total  disability,  an  average  man  earning  $2  a  day 
or  $12  a  week,  that  would  be  $8  a  week  as  long  as  he  lived.  He  is  making  a  small 
contribution  towards  that  insurance. 

The  Commissioner:  Especially  in  view  of  what  Mr.  Boyd  has  told  us  that 
over  50  per  cent,  of  these  accidents  cannot  be  avoided. 

.Mi;.  Boyd:  That  is  as  true  as  that  the  square  of  the  hypothenuse  of  a  right- 
angled  triangle  is  equal  to  the  sum  of  the  squares  of  the  other  two  sides. 

Mr.  Bancroft:     Did  you  ever  know  of  a  case,  or  was  it  ever  brought  out  in 

•  investigations  where  one  or  more  than  one  man  ever  wilfully  injured  himself 

i  ation? 

Boyd:     There  never  was  any  pointed  out,     We  have  statistics  in  Great 

and  European  countries  to  show  that  there  has  been  what  has  been  decided 

be  or  held  to  ho  malingering,  between  one  and  two  per  cent.     That  is,  in  cases  of 

bodily  injury. 

•  Ba]  I  -     Thai  is  they  did  not  want  to  go  back  to  work? 

Mi;.  Boyd:     Ma  ag. 

'I'm     Commissioner:     You    spoke    about    "malicious    negligence."        The 
ious   and  wilful    misconduct."     The  Washington  Act  is  some- 
thini:  e 

}U:-  WEQEm  ;lf  inflicted/'  or  something  like  that. 

'I'm:  Commissioner:  The  cases  where  a  man  will  indict  injury  upon  himself 
are  a  negligible  quantity.     The  cases  must  be  very  tow. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  327 


Mr.  Bancroft  :  1  think  it  is  the  same  in  the  Washington  Act  as  the  British 
Act.     We  didn't  see  much  difference  in  it. 

Mr.  Boyd:  I  have  the  language  of  our  Act  here,  "  In  case  such  injury  has 
arisen  from  the  wilful  act  of  such  employer"  then  he  is  allowed  to  sue  if  he  wants 
to.     I  think  the  same  language  is  used. 

Mr.  Bancroft:     Is  the  man  then  allowed  to  sue  under  the  common  law? 

Mr.  Boyd:  Yes,  but  only  in  that  particular  case,  and  it  was  put  in  on  the 
theory  that  it  really  belonged  to  the  Factory  and  Workshop  Inspection  Act.  It 
was  one  way  of  forcing  the  employer  to  guard  the  machinery. 

Me.  Wegenast:  If  he  sues  under  that  can  he  come  back  under  the 
compensation  ? 

Mr.  Boyd:     No,  he  surrenders  the  right. 

The  Commissioner:     What  about  the  employee? 

Mr.  Wegenast  :     It  is  section  6  in  the  Washington  Act. 

The  Commissioner:     That  is  a  question  of  detail. 

Mr.  Boyd  :  I  am  quite  sure  it  is  "  wilfully  causes  the  accident  for  the  purpose 
of  obtaining  compensation."     That  is  to  make  it  really  a  criminal  intent. 

Mr.  Bancroft:  For  instance  in  the  British  Act  I  think  it  was  always  on 
the  same  theory.     It  it  is  "  wilful  and  serious  misconduct." 

Mr.  Boyd  :  We  eliminated  "  serious,"  and  said  "  wilfully  causes  the  accident 
for  the  purpose  of  obtaining  compensation." 

The  Commissioner  :  Yours  apparently  is  very  much  narrower  than  the 
British  Act. 

Mr.  Bancroft:  If  a  man  was  convicted  of  that  does  that  stop  him  from 
getting  compensation,  or  does  his  family  still  get  compensation?  Supposing  he  is 
killed  or  permanently  injured  do  they  penalize  him? 

Mr.  Boyd  :  I  would  rather  get  the  section  and  see  the  final  form  of  it.  It 
was  intended  to  leave  it  like  the  German  Act,  that  he  lost  his  compensation  unless 
the  Board  saw  fit  anyway  to  give  it  to  him. 

Mr.  Doggett:  In  what  way  is  the  present  Act  of  Ohio  administered?  Is  it 
by  Commission  or  by  Board  of  Arbitrators  ? 

Mr.  Boyd  :  The  act  is  administered  by  a  Board  of  Awards  whose  members  are 
paid  so  much  a  year,  and  they  are  vested  with  the  sole  authority  to  administer  the 
Act  according  to  the  terms  of  the  act.  They  are  authorized  to  hire  an  actuary  who 
shall  classify  the  employments  with  reference  to  hazards,  and  fix  the  premiums. 
I  shall  send  to  your  Lordship  as  soon  as  they  are  published  the  lists  of  premiums 
that  the  employers  will  pay  under  the  Ohio  Act.  Then  they  are  authorized  to 
gather  information  from  the  employers  of  various  kinds.  Then  they  are  authorized 
to  receive  the  notices  and  to  make  the  awards  of  compensation  for  injuries. 

Mr.  Bruce:  Have  they  any  authority  to  direct  the  employers  to  put  up 
safety  guards  and  such  like,  and  to  adopt  safety  protective  measures? 

Mr.  Boyd  :     We  have  that  under  the  Factory  Act. 

Mr.  Bruce  :     Not  under  the  Board  ? 

Mr.  Boyd:     No.     He  has  a  right  to  sue. 

Mr.  Bancroft:  That  is  considered  a  means  of  compelling  the  employer  to 
keep  his  machinery  in  proper  order. 

Mr.  Boyd:  Yes,  but  that  was  a  compromise  part  of  it.  I  thought  that 
should  be  part  of  the  Factory  and  Workshop  Act. 

Mr.  Wegenast:  Do  you  classify  the  industries  according  to  hazard,  or  do  you 
classify  them  according  to  the  industry?  For  instance,  would  you  put  printers  and 
silver-smiths  in  the  same  class,  or  say  printers  and  carpenters,  just  because  the 


MINUTES  OF  EVIDENCE:  No.  65 


hazard  seemed  to  be  about  the  same,  or  do  you  classify  them  strictly  according  to 
the  industries? 

Mr.  Boyd:  I  have  not  been  in  the  office  down  there.  I  had  nothing 
to  do  with  that.  The  act  provides,  and  it  is  the  intention  of  the  act,  that  they 
be  classified  with  reference  to  the  hazard,  and  the  rate  fixed.  The  hazard 
determines  the  rate.  Whether  they  would  carry  that  out  to  the  point  of 
separation  if  it  is  a  fact  that  there  are  a  few  different  kinds  of  employment  that 
have  the  same  hazard,  I  don't  know. 

Mr.  Wegenast:     You  don't  know  whether  they  divide  them  up? 

Mr.  Boyd  :  I  don't  know  about  that.  What  will  happen  in  Ohio  is  this.  In 
the  course  of  a  year  or  two  after  this  is  well  started  then  there  will  be  an  assoc- 
iation of  employers  formed  harmonizing  with  the  provisions  of  the  act,  or  the  act 
harmonizing  with  the  expected  way  in  which  the  employers  will  organize,  you 
understand, — I  don't  care  which  way  you  put  it, — so  that  after  a  while  any  class  of 
employers,  A,  B,  C,  etc.,  will  begin  to  study  the  thing  out,  and  A  and  B  will  not  pay 
the  same  premiums.  A  and  B  will  each  pay  the  premium  of  the  hazard  which 
their  experience  has  shown  they  create.  If  John  Smith's  hazard  is  raised  during 
this  year  over  what  it  was  last  year  they  raise  his  rate  a  little. 

Mr.  Wegenast:     That  is  right  inside  the  same  class  of  industry? 

Mr.  Boyd:     Yes. 

Mr.  Wegenast:  You  would  divide  those  engaged  in  wood-working  into  a 
number  of  classes  according  to  the  hazard? 

Mr.  Boyd:  We  will  say  we  have  twenty-six  employers  in  the  foundry 
business.  At  the  start  they  will  all  pay  the  same  rate,  what  the  operations  of 
the  liability  insurance  companies  during  the  last  twenty-five  years  have  shown 
they  ought  to  pay — make  the  best  guess  the  actuary  can  make.  Then  after  a 
while  in  the  course  of  four  or  five  years  the  employers  in  those  twenty-six  classes 
will  say,  Here  now,  we  want  this  thing  fixed  so  that  the  employer  in  whose  business 
more  accidents  per  hundred  people  employed  in  his  business  occur  to  pay 
a  little  more.  In  other  words  under  the  German  Act  every  fellow  pays  in  accord- 
ance with  the  amount  he  draws  from  the  fund. 

Mr.  Wegenast  :  Do  you  consider  that  a  better  way  of  bringing  home  to  each 
employer  his  own  risk  than  throwing  it  on  him  individually  as  under  the  British 
Act? 

Mr.  Boyd:     Oh  yes,  I  think  it  is  much  better. 

Ah;.  Ransford:  That  might  be  pure  ill-luck,  that  condition  of  things.  For 
instance  we  might  all  be  in  the  foundry  business  and  at  the  end  of  three  years  I 
might  have  had  five  very  bad  accidents  and  you  none,  but  it  might  not  be  owing 
to  any  carelessness  on  my  part. 

.Mi;.    Boyd:     Of  course  there  is  a  small   number  of  accidents  that  is  called 

Now,  in  this  record  presented  here  it  gives  all  the  classes  and 

iformation  are  nil  iriven  so  that  you  can  check  it  up.     There  is  18 

t  of  the  accidents  due  to  the  employer,  28.4  due  to  the  employee,  and  54  per 

•■'■lit  due  i"  natural  risk. 

The  Com-  :     Bui  thai   natural  risk  is  common  to  all  businesses. 

Mr-  ,;"Yn:     T"  thi  he  talks  about  that  is  part  of  the  natural  hazard. 

The  <  OMM]     [oner:     Take  the  case  he  puis.     One  of  the  natural  hazards  is 

'"■•  ;""1  an  explosion   may  happen  in  one  place  and  not  in  another,  or  it 

kill  five  people  in  one  an.!  nobody  in  another.       That  is  following  up  Mr. 

tford'a  point.     W]  ild  a  man's  rate  be  increased  because  it  happened  in 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  329 

this  particular  foundry  he  was  unlucky  enough  to  have  these  natural  causes  operate 
more  severely? 

Mr.  Bancroft  :  Take  a  foundry  for  instance  where  men  are  carrying  ladles 
of  molten  metal,  and  sometimes  there  is  an  obstruction  in  the  way. 

The  Commissioner:     I  am  not  talking  about  negligence. 

Mr.  Boyd:  His  Lordship's  point  is,  are  not  these  accidents  part  of  the 
natural  hazard.  If  they  are  then  why  should  there  be  a  rule  requiring  every 
employer  to  pay  a  premium  in  accordance  with  the  accidents  which  take  place  in 
his  particular  place? 

The  Commissioner  :  Would  it  not  give  an  infinity  of  work  to  the  Board  to 
have  to  examine  into  that? 

Mr.  Boyd  :  We  do  not  put  them  in  in  the  start.  I  said  the  object  is  later 
to  amend  the  act  as  far  as  possible  and  make  everybody  pay  the  premium  he  ought 
to  pay,  just  as  I  do  on  my  house  that  I  own. 

The  Commissioner:  You  do  not  pay  because  you  have  been  particularly 
negligent;  you  pay  because  experience  has  shown  that  the  hazard  in  the  kind  of 
house  you  live  in  is  so  much.  You  do  not  pay  because  the  people  about  your  house 
have  been  careless  and  a  fire  has  been  caused. 

Mr.  Boyd:  Well,  I  have  never  investigated  that  particular  question,  as  to 
whether  that  accident  would  be  a  part  of  the  natural  hazard  or  not.  Your  Lord- 
ship may  be  correct  that  that  would  be. 

The  Commissioner:  The  insurance  company  classifies  the  different  build- 
ings.    I  should  think  it  would  not  work  out  very  satisfactorily  unless  you  did  so. 

Mr.  Boyd:  The  figure  is  given  here  as  one  per  cent,  of  all  accidents  as  due 
"to  act  of  God."  That  is  to  say,  outside  of  being  caused  by  the  employer  and  out- 
side of  being  caused  by  the  employee,  and  outside  of  the  natural  hazard.  That  is,  for 
instance,  lightning  would  not  be  regarded  as  part  of  the  natural  hazard. 

The  Commissioner  :  Do  you  guard  against,  or  provide  to  cover  such  cases  as 
this  ?  There  was  a  very  peculiar  case  recently  happened  in  England,  which  went  to 
the  House  of  Lords.  A  man  was  working  at  a  threshing  machine  out  of  doors  and 
a  wasp  stung  him,  and  blood  poisoning  followed  and  he  died.  They  held  that  he  had 
no  claim,  that  while  the  accident  happened  in  the  course  of  his  employment  it 
did  not  arise  out  of  the  employment,  and  therefore  he  was  out  of  it.  Would  your 
act  cover  such  a  case  as  that  ? 

Mr.  Boyd  :  Our  act  reads  like  this,  that  every  employer  employing  five  or 
more  persons  in  and  about  the  same  business  is  under  the  act. 

The  Commissioner:     Accidents  happening  when  and  how? 

Mr.  Boyd:  That  is  within  the  discretion  of  this  Board  or  this  Court.  Of 
course  an  act  could  not  define  all  those  particular  cases. 

Mr.  Bruce  :     Some  say,  "  In  and  about  the  course  of  his  employment." 

Mr.  Boyd:  It  would  be  for  the  Board  to  say  whether  he  was  entitled  and  if 
he  was  performing  his  duties  imposed  upon  him  as  an  employee  in  the  due  course 
of  his  employment. 

Dr.  Doggett  :  Take  the  case  of  a  man  working  for  a  contractor  who  had  not 
been  in  business  for  six  months,  or  six  weeks,  would  he  come  within  the  provisions 
of  the  act? 

Mr.  Boyd  :     Yes,  for  ten  days. 

Mr.  Doggett:     Although  the  employer  had  not  contributed? 

Mr.  Boyd:  Every  person  employing  five  persons.  At  one  place  they  wanted 
the  word  "  elect "  in  one  of  the  provisions,  so  I  went  down  and  put  in  the  provision 
if  they  did  not  pay  the  premium  it  would  take  away  all  common  law  defences. 


MINUTES  OF  EVIDENCE:  No:  65 

Now,  that  is  all  the  penalty  there  is.  Every  employer  "shall"  pay.  In  one  law- 
it  says  every  person  who  breaks  into  a  house  shall  be  dealt  with  so  and  so.  Take 
the  Washington  Act.  They  repealed  the  common  law  remedy.  They  have  to  have 
a  penalty  to  enforce  the  Act  in  case  the  employer  fails  to  pay  the  premium  into 
their  fund.  The  Ohio  Act  is  as  obligatory  as  it  can  be  made.  What  difference 
would  it  make  to  say  "  if  anybody  elects  to  break  into  a  house  he  shall  be  dealt  with 
so  and  so"?     What  difference  does  it  make? 

Mi;.  Watts:  You  spoke  of  49  per  cent,  of  all  injuries  being  covered  by  that 
week's  waiting  period. 

Mr.  Boyd:     They  will  occur  within  seven  days. 

Mr.  Watts  :  Xowt,  that  whole  49  per  cent,  does  not  last  a  whole  wreek.  One 
man  might  be  injured  and  not  be  off  at  all,  another  man  might  be  off  one  day,  and 
another  two  days,  or  three  days,  or  four  days.  So  that  that  49  per  cent  does  not 
contribute  one  week.     It  would  range  from  nothing  to  seven,  or  six  days. 

Mr.  Boyd:     Yes.     Of  course  some  only  last  one  day. 

Mr.  Watts:  The  contribution  that  a  man  makes  is  the  wages  he  loses  during 
that  idle  time  ? 

Mr.  Boyd:     Yes. 

Mr.  Watts  :  If  he  is  off  six  days  he  loses  six  days'  wages,  but  if  one  day  he 
only  loses  one  day's  wages,  so  it  is  only  a  percentage. 

Mr.  Boyd  :     Yes.     In  fact  the  most  of  it  is  less  than  three  days. 

Mr.  Wegenast  :  Yesterday  I  expressed  a  doubt  as  to  your  figures.  I  thought 
the  figure  was  41  per  cent.,  and  I  expressed  a  doubt  as  to  the  correctness  of  that. 
It  appeared  to  me  to  be  a  very  large  percentage  of  the  accidents. 

Mr.  Boyd:  You  are  talking  about  the  percentage  of  accidents  that  last  only 
one  week.     I  am  quite  sure  it  is  49  per  cent.,  but  I  will  write  you  about  that. 

Mr.  Wegenast  :  I  had  41  per  cent,  in  the  report  of  the  Federal  Commission, 
and  I  expressed  a  doubt  as  to  the  correctness  of  even  that  figure.  I  just  wanted 
to  have  your  confirmation  of  it. 

Mr.  Boyd:     I  will  write  you  a  letter  as  to  that. 

Mr.  Harris:  Mr.  Bancroft  asked  you  a  question,  if  when  investigating  the 
matter  any  case  came  before  you  where  it  was  known  that  a  man  deliberately  had 
injured  himself  to  get  compensation,  and  you  answered  no. 

Mr.  Boyd  :     I  said  there  was  no  one  produced  a  case. 

Mr.  Harris:  Then- you  went  on  to  say  I  believe  in  the  Ohio  Act  it  states 
that  if  a  man  deliberately  causes  an  accident  to  obtain  compensation  he  shall  not 
receive  it.     That  is  hardly  the  words,  but  it  is  the  sense. 

Mi;.  Boyd:  Yes,  if  a  man  wills  to  cause  the  injury  for  the  purpose  of  obtain- 
ing tlif  compensation. 

Mi;.  Harris:  Can  you  loll  what  was  in  the  minds  of  the  committee  that 
prompted  thai  language  when  no  case  came  before  the  Commission? 

Mi;.  Boyd:  Well,  the  German  Act  provides  this,  that  it  defeats  his  claim 
to  compensation,  bul  the  Board  may  nevertheless  give  the  dependants  or  the  man 
compensation  even  if  lie  wills  it.  It  is  left  with  the  Board.  It  defeats  his  right 
to  compensation  if  if  is  shown  that  he  willed  the  injury  for  the  purpose  of  obtaining 
compensal  inn. 

Mi:.  Harris:     Sometimes- they  do  will  it  too. 

Thai  is  my  own  personal  position,  that  it  ought  to  defeat  him  in 
,,lf'  nghl  in  obtain  it,  hut  there  might  be  circumstances  brought  to  the  attention 
°r  the  Board  which  would  cause  them  to  say  it  had  hotter  be  paid  in  part  or  whole 
to  the  dependants  anyway.     Supposing  a  man  committed  suicide  and  they  could 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  331 

prove  it,  it  would  be  a  very  hard  case,  and  what  is  the  difference  to  the  dependants 
whether  he  did  or  not? 

Mr;.  Harris:  As  Mr.  Bancroft  has  said  there  has  been  different  expressions 
of  opinion,  and  the  one  opinion  that  seemed  to  prevail  was  that  some  do  deliberately 
injure  themselves  for  compensation.  Now.  that  act  as  framed  shows  there  must 
haw  been  in  the  minds  of  the  Commisioners  some  idea  of  that  kind,  that  some 
men  do  deliberately  endeavor  to  get  injured  for  compensation. 

Mr.  Boyd:     Yes,  we  just  accepted  that  as  a  physical  possibility. 

Mr.  Bancroft:     It  wasn't  proved  at  all. 

Mr.  Boyd  :     No,  it  was  not  proved  in  our  hearing.     Of  course  statistics  have 

been  gathered  from  different  countries  to  show  that  once  in  a  while  it  happens, 

and  that  under  the  operation  of  the  British  Act  it  is  something  over  one  per  cent. 

.  As  I  stated  it  was  held  that  they  did.       Whether  they  did  or  not,  as  far  as  the 

operation  of  the  act  is  concerned  they  did. 

Mr.  Bancroft:  Your  remark  threw  some  light  on  the  subject.  That  Act 
was  probably  framed  having  in  mind  that  a  man  might  commit  suicide,  or  some- 
thing like  that. 

Mr.  Boyd  :     Well,  of  course  there  are  a  few  men  commit  murder. 

Mr.  Harris:  The  question  I  asked,  and  which  I  did  not  think  was  answered, 
was  what  in  your  opinion,  if  you  wouldn't  mind  giving  it,  would  you  consider  the 
best  plan  if  the  workman  contributes — whether  it  should  be  in  a  money  contribution 
or  a  waiting  period  ? 

Mr.  Boyd:  I  think  he  ought  to  contribute.  Now,  I  am  basing  this  state- 
ment on  the  experience  of  the  German  Act,  and  some  European  acts.  He  ought 
to  contribute  for  personal  injuries  about  16  per  cent,  assuming  the  total  disability 
lasts. 

Mr.  Harris:     In  money? 

Mr.  Boyd:  Yes.  You  couple  with  that,  however,  this  waiting  period.  That 
waiting  period  should  be  narrowed  down  as  far  as  experience  will  warrant  it  be- 
ing narrowed.  The  only  object  of  the  waiting  period  is  to  shut  out  abuse.  That 
must  be  shut  clown.  Now,  on  the  theory  that  he  contributes  a  'Substantial  amount, 
and  of  course  three  or  four  per  cent,  would  be  more  trouble  to  look  after  than  it 
is  worth,  it  is  simply  to  recognize  the  principle,  if  it  is  sound  economics,  if  the 
workmen  are  all  interested  in  the  fund  it  will  have  a  tendency  to  prompt  them  to 
watch  their  neighbours,  and  so  on.  There  is  some  sense  in  that.  But  that  is 
under  the  assumption  that  total  disability  is  compensated  as  long  as  it  lasts. 

Mr.  Gaxder:  Does  the  State  collect  this  fund,  or  how  do  they  guarantee  it? 

Mr.  Boyd:  The  act  authorizes  the  Board  to  classify  the  premiums  and  fix 
the  premiums  to  pay  the  compensation. 

Mr-  Wegexast  :     Does  a  man  send  in  his  cheque  or  what  does  he  do? 

Mr.  Boyd:  Why,  they  send  him  a  statement,  or  a  blank  in  which  he  can- 
fill  out  the  amount  of  his  pay-roll,  and  so  on,  during  the  last  year,  or  during  the 
last  six  months,  and  he  makes  an  affidavit  that  he  is  in  such  and  such  a  business, 
and  that  puts  him  in  the  class.  If  he  is  in  such  a  class  then  his  rate  is  so  much. 
Then  he  makes  an  affidavit  that  his  pay-roll  is  so  much,  and  he  multiplies  his 
pay-roll  by  the  rate,  and  that  is  the  amount  he  has  to  pay.  and  lie  writes  his 
cheque  and  attaches  it  to  his  affidavit,  and  the  moment  it  is  posted  that  is  notice 
to  the  employees  that  they  are  insured  against  all  accidents  and  entitled  to  get  all 
the  compensation  that  that  act  provides,  the  moment  it  is  posted  in  the  building. 

Mr.  Wegexast  :  I  have  a  table  here  given  by  Mr.  Schwedtman,  and  I  wanted 
to  ask  you  whether  it  is  correct  or  not- 


MINUTES  OF  EVIDENCE:  No.  65 

Mr.  Boyd:     That  is  liability  insurance. 

As  I  say  nobody  knows  what  the  Ohio  rates  are,  unless  they  have  been  published 
since  I  left  Toledo.     I  will  send  his  Lordship  the  rates  just  as  soon  as  I  can. 
Adjourned  at  1  p.m.  till  2.30  p.m. 

2.30  p.m.  resumed. 

The  Commissioner:  If  there  is  anyone  desires  to  ask  Mr.  Boyd  any  ques- 
tions now  is  the  time- 

Mr.  Bruce:  There  was  one  statement  I  understood  Mr.  Boyd  to  make  this 
morning  in  his  opening  remarks,  that  in  Great  Britain  the  workers  contributed  one- 
third.     Would  that  relate  to  workmen's  compensation  or  State  insurance? 

Mr.  Boyd:     That  is  Lloyd  George's  Bill. 

Mr.  Bruce  :     But  not  to  the  Workmen's  Compensation  Act  ? 

Mr.  Boyd:     Oh,  no. 

The  Commissioner:  I  did  not  quite  understand  your  statement  as  to  the 
limit  of  $1,200  or  $3,400,  as  the  case  may  be.  You  stated  that  in  case  of  total 
disability  a  man  received  a  proportion  of  his  wages. 

Mr.  Boyd:  66  2-3  per  cent,  as  long  as  he  lived,  with  two  limits,  a  maximum 
of  $12  a  week  and  a  minimum  of  $5  a  week. 

The  Commissioner:  That  is  partly  invalidity  insurance,  and  old  age  in- 
surance, because  if  he  lives  over  65  he  probably  would  be  incapable  of  work,  and 
you  still  provide  for  him. 

Mr-  Boyd:     Yes. 

The  Commissioner:     Then  what  is  the  $3,400? 

Mr.  Boyd:  In  case  of  death  he  gets  66  2-3  per  cent,  of  his  average  weekly 
wages  for  300  weeks.  A  minimum  of  $5  a  week  would  be  $1,500,  and  the  maxi- 
mum for  300  weeks  would  be  $3,600. 

The  Commissioner:     That  is  death? 

Mr.  Boyd:     There  was  a  slight  compromise  on  the  $3,400,  you  see-     It  is 

not  necessary  to  go  into  it  any  further  beyond  illustrating  this  point,  because  it 

will  all  appear  in  this  record.     I  will  just  illustrate  the  point.     They  had  370 

fatal  cases  that  were  investigated  in   Cuyahoga  county  during  the  period  from 

1905  to  1910.     Now,  there  were  135  of  those  cases  that  received  something  up 

to  $300,  or  an  average  of  $163.83.     Then  there  were  107  of  those  cases  received 

something  between  $300  and  $1,000,  or  an  average  of  $519.81.       There  were  71 

cases  that  received  something  between  $1,000  and  $2,000,  or  an  average  of  $1,269.98. 

There  were  42  cases  that  received  something  between  $2,000  and  $4,000,  or  an 

581.13.     There  were  15  cases  received  something  above  $4,000.  or 

:&    of    $4,991.66.       There    were    the    15    best    cases    out    of    the    307. 

quarter   off   $4,991    and   you   got    $3,740.    and   $150    doctor's  bill    off 

would  leave  a  little  less  than  $3,600.     In  other  words  it  brought  it 

down  below  the  $3,600,  and  they  compromised  on  it  and  called  it  $3,400,  and  the 

wot]  organizations  all  agreed  to  that. 

TH]  ussioner:     Would  you  mind   re-stating.  Mr.   Boyd,  your  reasons 

linking  at  least  ten  per  cent,  should  be  paid  by  the  employees? 

The  reafon  that  they  made  them  contribute  at  a,ll  was, — and 
it  was  unanimously  agreed  if  they  contributed  at  nil  their  contribution  should  be 
substantial;  thai  is,  to  the  extent  of  amounting  to  considerable  more  than  it 
•would  cost  lo  collect  it — for  the  purpose  of  having  them  all  interested  in  the 
fund,  "ii  the  theory  that  the  workmen  all  being  interested  in  the  fund  would  have 
I  care  to  see  thai  his  ueighbours  were  more  careful,  or  whether  his  neighbours  or 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  333 


fellow-workmen  were  practising  any  imposition  upon  the  fund,  because  it  is  cost- 
ing him  money.  That  is  the  theory  upon  which  he  is  in.  If  he  is  identified  with 
the  fund,  the  employers  said,  it  would  tend  to  eliminate  any  friction  between  the 
employee  and  the  employer.  Now,  a  careful  investigation  of  the  German  Act 
convinced  me  that  in  bodily  injuries  he  paid  about  one-seventh,  or  sixteen  or  seven- 
teen per  cent,  so  we  made  it  15  to  17  per  cent,  for  bodily  injury.  The  employers 
insisted  upon  it  being  25  per  cent,  and  then  we  came  back  at  them 
and  made  them  agree  to  total  disability  as  long  as  it  lasted,  under  those  higher 
terms.  The  legislature  would  not  take  the  position  of  not  making  them  con- 
tribute, but  they  would  not  take  the  position  to  make  him  contribute  25  per  cent, 
and  they  compromised  on  ten  per  cent,  in  a  Conference  Committee  between  the 
Senate  and  the  House.  It  never  had  to  be  re-threshed  out  in  the  two  Houses. 
The  Conference  Committee  of  the  two  Houses  agreed  on  that. 

The  Commissioner:  What  did  I  understand  in  your  view  to  be  the  basic 
principle  of  such  an  act  as  we  are  discussing,  whether  you  call  it  an  Industrial 
Insurance  Act  or  not? 

Me.  Boyd:  The  basic  principle  is  simply  this,  that  it  is  an  insurance  for 
the  workingman  and  his  dependants  against  economic  insecurity  arising  out  of 
the  modern  wage  system.  As  Bismarck  said,  it  provides  that  the  dependants  of 
persons  whose  earning  power  has  been  interefered  with  shall  not  be  hampered  in 
being  able  to  get  a  normail  training  up  to  a  point  where  they  are  able  to  support 
themselves  without  having  to  fall  back  upon  private  or  public  charity. 

The  Commissioner:  Is  it  a  violation  of  that  principle  to  take  out  of  the 
fund  for  the  support  of  the  dependants  of  a  man  who  has  brought  the  injury 
upon  his  own  head  by  his  own  misconduct,  and  perhaps  has  injured  others,  as  well 
as  his  employer? 

Mr.  Boyd:  Well,  it  is  consistent  with  this  position,  that  the  dependants 
are  in  no  way  responsible. 

The  Commissioner:  Is  that  not  getting  into  the  region  of  the  eleemosynary, 
rather  than  the  economic  field? 

Mr.  Boyd:  No,  I  think  not.  There  is  no  great  evidence  to  show  that  work- 
men injure  themselves  intentionally- 

The  Commissioner:  I  am  not  putting  that  case  at  all.  The  case  has  been 
put  once  or  twice  here.  For  instance  a  locomotive  engineer — we  will  assume  the 
facts  to  be  as  I  state  them — deliberately  with  his  eyes  open,  and  nothing  com- 
pelling him  to  do  it,  passes  a  signal  which  says  to  him  to  stop.  There  is  another 
train  coming  on  that  track,  and  the  result  is  that  a  collision  follows  and  half  a 
dozen  lives  are  lost  and  thousands  of  dollars  of  property  destroyed.  He  breaks 
his  leg.  Upon  what  principle  is  that  man  entitled  to  compensation?  I  can 
understand  appealing  to  the  generosity  of  the  public  for  his  dependants  who  are  in 
no  way  responsible  for  his  act. 

Mr.  Boyd:  It  is  on  the  ground  of  the  protection  of  the  health,  safety  and 
general  welfare  of  the  public,  because  his  dependants,  no  matter  whether  he  is 
negligent  or  not,  in  many  cases  are  apt  to  become  public  charges.  Now,  the 
family  as  a  unit  are  the  subjects  of  the  State,  and  the  reason,  as  I  said  before, 
why  Germany  put  it  in  operation,  without  asking  whether  the  injury  was  intentional 
or  not,  was  to  assure  the  dependants  at  least  of  an  amount  sufficient  to  bring 
them  to  a  point  of  being  able  to  support  themselves. 

The  Commissioner:  Let  me  add  one  more  factor  to  my  case.  Suppose  that 
man  is  worth  $15,000?  Is  there  anything  to  justify  taking  anybody's  money 
to  compensate  him  or  provide  for  his  family? 


334  MINUTES  OF  EVIDENCE:  No.  65 

Mi;.  Boyd:     Well.  I  don't  know  that  there  is,  but  that  is  a  very  rare  case. 

The  Commissioner:     Of  course  it  is. 

Me.  Boyd:  Of  course  limiting  it  to  66  2-3  per  cent,  or  50  per  cent.,  or  60 
per  cent.,  whichever  rule  you  follow,  it  is  simply  that  he  shall  not  he  able  under 
any  circumstances  after  he  is  injured  to  get  quite  as  much  as  he  did  before  he 
was  injured — to  earn  as  much. 

The  Commissioner:  It  is  said  that  there  is  no  State  guarantee  .in  the 
Washington  Act.     Is  there  in  the  State  of  Ohio  any  guarantee? 

Me.  Boyd:     You  mean  in  regard  to  the  fund? 

The  Commissioner:     Yes,  if  it  should  fall  short. 

Mr.   Boyd:  Well,  your  Lordship,  the  act  authorizes  the  actuary  to  fix  the 
'premiums  so  that  the  fund  will  be  able  to  pay  all  the  claims  against  it 

Tut:  Commissioner:  So  the  State  is  never  called  upon  to  do  anything  but 
pay  the  cost  of  administration? 

Mr.  Boyd:  Yes.  In  Germany  the  employer  and  emplo}ree  pay  a  great  deal 
of  the  cost  of  administration. 

The  Commissioner  :  Well,  an  accident  happens  and  death  follows,  or  total 
disability.     What  is  done  then  in  the  case  of  death? 

Mr.  Boyd:  Well,  the  dependants,  the  widow  or  otherwise,  file  notice  with 
the  Board  that  John  Smith  was  killed,  that  John  Smith  was  her  husband,  and 
he  has  so  many  children,  so  many  dependent  upon  his  earning  capacity-  Then 
the  Board  notifies  them  that  there  will  be  a  hearing  of  the  case  at  a  certain  time, 
and  to  make  proof  of  what  his  average  weekly  wages  were,  and  of  what  the  actual] 
medical  expense  was.  They  would  allow  the  widow  and  the  dependants  up  to  $150 
for  doctor's  bills  and  funeral  expenses.  Of  course  they  would  not  allow  that 
much  if  they  did  not  spend  that  much,  but  they  would  not  allow  any  more  than 
thai  no  matter  how  much  they  spent.  Then  they  take  two-thirds  of  the  average 
weekly  wages  and  multiply  it  by  300,  and  if  it  made  more  than  $1,500  and  less 
than  $3,400  it  would  be  paid  in  monthly  instalments. 

The  Commissioner:     Where  are  you  going  to  get  the  money  to  do  that? 

Mr.  Boyd:  The  actuary  publishes  the  rate  and  the  employer  pays  the 
premium.  He  multiplies  his  ]5ay  roll  for  the  preceding  year  by  the  rate,  and 
pays  it  into  the  treasury  and  gets  a  receipt,  and  posts  it  in  and  about  his  place 
of  business,  and  when  he  does  that  all  his  employees  are  insured  under  this  act. 

The  Commissioner:  Supposing  you  had  50  or  100  of  these  cases,  in  which 
between  $1,500  and  $3,400  was  to  be  paid  out?  Would  the  annual  contributions 
provide  for  that?  Because  in  the  Washington  Act  there  is  a  provision  about  the 
employer  providing  the   fund. 

Mn.  Boi'D:  Well,  that  is  provided  in  the  same  way  as  ours  is,  except  in 
the  Washington  Act  they  appropriated  $150,000  to  start  off  with. 

Mi;.    Wegenast:     What  your  Lordship  has  reference  to,   I   suppose,   is  the 
tin-  aside  of  the  $4,000.    That  is  not  done  by  the  employer  but  by  the  insurance 
department 

Tin:  ( low  MISSION]  i; :  I'ut  you  are  getting  now  on  to  your  proposition  to  prevent 
the  bringing  into  operation  of  such  a  scheme  as  is  proposed  as  being  too  onerous. 
•Im-i  explain,  Mr.  Wegenast,  wha!  your  scheme  is  in  that  resped  to  Mr.  Boyd. 

Mi:.  Wegenast:  Well,  the  scheme  is  that  advocated  by  Mr.  Dawson  as  set 
out  in  In-  -mi.  im-iii  and  his  brief  before  the  Federal  Commission,  and  is  briefly 
this,  thai  each  year  only  enough  should  be  assessed  upon  the  employers  to  pay 
the  pensions  due  for  thai  year,  with  perhaps  a  small  margin. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  335 


Mr.  Boyd:     But  the  award  is  made. 

Me.  Wegenast:  Yes,  but  the  idea  is  not  to  levy  at  once  enough  to  lay 
aside  a  reserve  fund  to  provide  for  all  the  future  payments- 

The  Commissioner :  How  does  your  act  work,  Mr.  Boyd? 

Mr.  Boyd:  Our  act  does  not  provide  thai  way.  It  provides  that  the  premium 
shall  take  care  of  all  these  compensations.  They  are  only  paid  monthly,  and  I 
understand  Mr-  Wegenast  to  say  when  an  award  is  made  it  is  only  paid  out  as  the 
instalments  come  along. 

Mr.  Wegenast:  Yes,  that  is  the  way  the  Washington  Act  works,  but  under 
the  system  advocated  by  Mr.  Dawson,  and  under  the  system  which  is  in  operation 
in  Germany  the  plan  was  to  assess  simply  enough  to  pay  the  payments  for  that  year. 
In  the  following  year  the  assessment  would  be  what  was  necessary  to  carry  the 
dependants  of  the  year  before,  plus  the  dependants  accruing  in  that  year,  and  the 
annual  rate  would  under  normal  conditions  continue  to  increase  for  a  period  of 
thirty-five  years  or  so. 

Mr.  Boyd:  Under  the  Ohio  Act  they  can  do  it  either  of  those  ways-  They 
can  work  it  out  in  whichever  way  they  think  best. 

The  Commissioner:  When  you  left"  the  common  law  liability  open  why 
was  it  you  did  not  abolish  the  idea  of  common  employment,  and  the  rule  of  con- 
tributary  negligence  ? 

Mr.  Boyd:  Just  like  the  Washington  Act?  This  is  the  reason  we  did  not 
do  that.  The  labour  organizations  had  just  put  through '  the  legislature  the 
Norris  Bill  which  modified  all  the  common  law  employments.  Well,  the  State 
was  all  torn  up  about  it,  and  it  was  out  of  the  fight  on  that  Bill.  They  said  the 
legislature  passed  that  Bill  and  now  we  will  appoint  a  Commission  and  go  into 
this  thing  and  get  a  new  remedy  and  thresh  it  all  out.  Well,  that  we  had  just  got 
through  with,  and  so  we  decided  to  leave  it  there,  but  to  put  it  out  of  business  as 
far  as  the  act  covered  the  employment. 

Mr.  Wegenast:  You  have  in  all  your  States,  Mr.  Boyd,  I  think,  as  between 
the  labor  interests  and  the  employing  interests,  a  controversy  as  to  whether  the 
Act  should  assume  the  form  of  a  liability  law,  stripping  the  employer  of  his 
defences,  or  a  compensation  law,  implying  of  course  an  insurance  scheme  of  this 
kind. 

Mr.  Boyd:  We  might  say  up  until  1910  all  the  fight  was  on  the  common 
law,  the  modification  of  the  common  law  defences.  Then  the  moment  that  those 
fights  grew  more  intensified  in  say  ten  or  fifteen  of  the  States,  then  they  came 
to  the  realization  that  it  was  necessary  to  adopt  a  Compensation  Act  or  Industrial 
Insurance  Act. 

Mr.  Wegenast:  So  that  an  individual  liability  act  does  not  represent  a  per- 
manent solution? 

Mr.  Boyd:  Oh  no.  I  think  I  have  demonstrated  that  in  these  statistical 
systems. 

The  Commissioner:  That  is  what  you  explained  to  us,  wasn't  it,  about  the 
effect  of  the  e'mployers'  liability  insurance?  Do  you  mean  to  say  if  the  doctrine 
of  common  employment  were  eliminated,  and  the  contributory  negligence  of  the 
workman  did  not  disentitle  him  to  recover,  that  it  would  not  increase  the  number 
of  cases  very  largely  in  which  compensation  could  be  recovered  under  Employers' 
Liability  law? 

Mr.  Boyd:  They  would  theoretically  recover  if  all  the  common  law  con- 
ditions were  abolished  in  18  per  cent,  of  the  cases- 


336  MIXUTES  OF  EYIDEXCE :  Xo.  65 


The  Commissioner  :  Why  so  few  ?  Do  you  mean  the  other  cases  would  be 
tilings  for  which  the  employer  would  not  be  responsible? 

Mr.  Boyd:  Xo,  we  wouldn't  have  a  case  at  all. 

The  Commissioner:  With  these  doctrines  eliminated? 

Me.  Boyd:  Yes. 

The  Commissioner:  Suppose  you  had  to  delay  the  passing  of  your  act 
and  you  wanted  to  provide  a  temporary  measure  for  bridging  over  the  difficulty, 
what  would  be  the  objection  to  providing  that  these  three  doctrines  that  you 
mentioned  should  no  (longer  have  application  ? 

Mr.  Boyd:     Which  would  mean  the  common  law  defences? 

The  Commissioner:     Yes?     What  objection  would  there  be  to  that? 

Mr-  Boyd:  Well,  I  think  the  development  of  the  proposition  has  been 
brought  to  such  perfection  it  would  be  better  to  delay  a  few  months  and  adopt 
the  right  method,  than  to  adopt  a  compromise. 

The  Commissioner:  Only  as  a  temporary  measure.  It  is  admitted  appar- 
ently on  all  hands  that  the  present  law  is  unjust. 

Mr.  Boyd:  Yes.  When  they  took  up  the  Xew  York  Act  Mr-  Wainwright 
was  in  favour  of  the  insurance  plan.  He  was  the  Chairman,  but  he  didn't  have 
the  courage,  or  they  did  not  feel  like  going  so  far  as  to  introduce  an  insurance 
Act,  so  they  adopted  a  modification  of  the  British  Compensation  Act,  with  the 
hope  that  the  Supreme  Court  would  sustain  it.  That  was  a  perfectly  hopeless 
proposition  because  while  the  court  admitted  that  their  investigations  showed  that 
the  present  method  of  providing  compensation  under  the  common  law  remedy  with 
more  or  less  modified  common  law  defences  was  justifiable,  yet  they  said  that"  this 
remedy  that  you  have  chosen  is  an  impossible  remedy  under  the  constitution  of 
Xew  York  State ;  that  is  taking  property  without  due  process  of  law.  That  brings 
us  right  back  to  the  Abinger  decision  in  Priestly  v.  Fowler,  and  in  Ohio,  for 
example,  it  would  drive  a  large  number  of  employers  out  of  business.  You  take 
away  the  common  law  defences,  and  to-morrow  he  would  be  liable  for  $2,000  or 
$3,000  or  $4,000  where  yesterday  he  was  not  liable  at  all,  and  50  per  cent,  of  all 
employers  employ  less  than  20  men.  But  if  the  employer  is  put  in  a  position 
where  he  can  pay  a  small  premium,  his  prorated  share,  and  insure  himself  against 
the  liability  of  his  workmen  being  injured,  and  they  receive  the  same  protection 
that  the  United  States  Steel  Corporation  may  individually  be  able  to  furnish  with 
its  own  individual  scheme,  as  it  has,  and  the  International  Harvester  Company 
has,  the  court  is  bound  to  find  that  you  have  not  offered  to  find  a  reasonable 
remedy  when  one  exists  and  bring  it  within  the  law,  namely,  the  principle  of 
ation.  I  might  bring  in  one  thing  that  I  omitted,  and  that  is  this,  the  legal 
justification  in  the  United  States  is,  you  appropriate  the  right  of  the  employer 
to  !.  just  the  same  as  in  the  right  of  Eminent  Domain  you  expropriate  a 

;  property.    You  ran  take  it  in  three  ways,  for  general  taxation,  for  general 

public  |>i:  or  you  can  take  it  for  special  assessments  where  the  man  assessed 

benefit,  such  as  in  the  paving  of  the  street  in  front  of  his  lot,  and 

in  the  genera  ition  he  gets  the  general  improvements  of  the  city,  sewers  and 

In  II"-  right  of  Eminent  Domain  if  a  man's  property  is  taken  he  is  supposed 

to  gel   i id   adequate  compensation.       This  comes  under  the  exercising 

of  the  taxation  power  or  police  power,  taking  the  right  of  the  employer  to  defend, 
;|"''  taking  tl  t  of  the  employee  to  sue,  and  gives  back  to  the  employer  pro- 

tection from  thi  and  ■_  iack  to  the  employee  his  right  to  compensation 

no  matter  whose  fault,  except  where  the  fault  is  malicious. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  337 


Now,  just  as  a  matter  of  interest,  for  I  do  not  pretend  to  understand  the 
jurisprudence  of  the  Dominion  Government,  but  I  wish  to  call  his  Lordship's 
attention  to  a  case  that  is  extremely  interesting  to  a  student  of  American  juris- 
prudence. In  section  92  of  the  British  North  America  Act,  sub-section  13,  the 
heading  of  the  act  says,  "In  each  Province  the  legislature  may  exclusively  make 
laws  in  relation  to  matters  coming  within  the  class  of  subjects  next  hereinafter 
mentioned,  that  is  to  say."  Then  section  13,  "Property  and  Civil  Eights  in  the 
Provinces."  Under  that  section  you  had  a  case  under  what  is  called  the 
Prince  Edward  Island  Land  Purchase  Act  of  1875.  This  act  was  passed  to  convert 
the  leasehold  tenures  into  freehold  estates  upon  terms  just  and  equitable  to  the 
tenant  as  well  as  to  the  proprietor,  for  which  purpose  it  provided  a  Commissioner's 
Court,  by  proceedings  in  which  a  compulsory  transfer  of  the  lands  affected  to  the 
Government  could  be  obtained,  and  in  Kelly  v.  Sullivan  the  Supreme  Court  of  the 
Island  held  that  the  act  came  within  sub-section  13  of  section  92  of  the  British 
North  America  Act  as  legislation  on  property  and  civil  rights  of  the  Province. 
Peters,  J.,  observes  in  2  P.E.I.,  pages  87  and  88,  "If  the  Provincial  Legislature 
is  restricted  to  subjects  coming  under  what  American  jurists  call  the  right  of 
Eminent  Domain,  it  seems  to  me  that  this  act,  at  least  in  some  of  the  provisions, 
would  be  an  excess  of  legislative  power,  for  no  such  emergency  exists  that  would 
justify  legislative  interference  under  the  right  of  Eminent  Domain." 

Now,  there,  where  these  large  estates  were  held,  on  the  ground,  as  provided 
under  the  British  North  America  Act,  for  the  peace,  order  and  good  Government 
of  the  Dominion,  or  the  Provinces,  or  as  we  say,  exercising  the  police  power  for 
the  protection  of  the  health,  safety,  and  general  welfare  of  the  public,  they  passed 
this  act  which  says  you  must  sell  your  property  to  the  Dominion  Government  at 
an  appraised  value  fixed  by  this  court  created  by  the  act,  and  the  Dominion 
Government  pays  them  so  much  for  the  land,  and  pays  the  tenant  so  much  for 
his  interests,  and  then  can  sell  the  land  to  the  public  at  4arge?  an<^  thus  create 
an  entirely  new  status  of  owning  and  farming  land  between  owners  and  tenants 
and  the  public  at  large-  For  what  reason?  For  the  peace,  order  and  good 
Government  of  the  Dominion.     Nowr,  that  is  exceedingly  interesting  to  us. 

The  Commissioner:  You  told  us,  Mr.  Boyd,  that  the  Act  applies  only  to 
persons  employing  five  or  more? 

Me.  Boyd  :     Five  persons  or  more,  yes. 

The  Commissioner:  Is  there  any  option  to  persons  who  are  not  employing 
as  many  taking  the  benefit  of  the  act? 

Me.  Boyd  :     There  is  nothing  in  the  act. 

The  Commissioner  :     Would  that  not  be  a  proper  provision  ? 

Mr.  Boyd:  Yes.  We  recommended  that,  but  through  an  oversight  it  was 
not  put  in.  You  remember  seeing  about  a  lot  of  graft  in  the  legislature,  and 
they  indicted  ten  or  fifteen  of  the  legislators  at  that  time.  That  was  merely 
an  oversight  that  it  did  not  provide  that  it  be  left  optional  on  those  employing 
less  than  five  men  to  come  in.     It  should  so  provide- 

The  Commissioner:  Take  an  employer  with  a  few  men.  Perhaps  in  the 
summer  time  he  will  have  five  or  six  and  in  the  winter  time  he  will  have  one  or 
two,  or  perhaps  none.     How  is  he  classified? 

Mr.  Boyd:  Well,  there  is  a  large  discretion  residing  in  the  Board.  The 
act  says  every  employer  employing  five  persons  or  more,  that  is,  regularly  employing 
five  persons  or  more,  in  and  about  the  same  business. 

The  Commissioner  :     Would  they  then  take  the  average  over  the  year,  or  how 
would  they  work  that  ? 
22  l. 


338 


MINUTES  OF  EVIDENCE:  No.  65 


Me.  Boyd:  Well,  half  or  more  of  the  year.  You  see  it  was  merely  on  prac- 
tical grounds,  to  let  out  domestic  servants  and  casual  employments,  and  most  of 
the  farmers;  but  it  is  intended,  of  course,  to  put  the  farmers  all  in  in  a  short 

time. 

The  Commissioner  :  If  they  will  let  you. 

Me.  Boyd:  In  spite  of  their  letting  us. 

The  Commissionee :  "Which  is  larger,  the  urban  or  rural  population  in  Ohio? 

Me.  Boyd:  The  city  population.  It  is  like  this.  The  labour  organizations  and 
the  employers'  associations  are  much  more  readily  educated  on  the  proposition 
than  the  scattered  and  isolated  farmers.  They  have  very  little  organization  as 
yet,  but  organizations  are  being  developed  among  the  farmers. 

The  Commissionee:  Do  you  think  you  will  ever  educate  a  farmer  to  believe 

in  that? 

Ah;.  Boyd:     "We  got  their  leaders  to  admit  it  after  the  Act  was  passed. 

The  Commissionee:  Do  you  mean  to  say  you  will  ever  get  him  to  believe 
that  if  he  has  John  Smith  employed,  and  John  Smith  goes  into  the  stable  and  a 
horse  kicks  him  and  kills  him  that  he  should  pay  $2,000? 

Me.  Boyd:  I  was  raised  on  a  farm  myself  until  I  was  25  years  old,  and  a 
very  large  percentage  of  the  farmers  only  have  the  husband  and  sons  working, 
and  if  through  some  misfortune  the  son  is  seriously  injured,  or  the  farmer  is 
iously  injured,  there  would  not  be  any  sense  in  suing  himself,  but  when  this 
aci  comes  into  force  he  can  insure  himself  and  get  compensation.  It  was  de- 
liberately left  out  for  the  purpose  of  getting  the  act  as  far' as  we  could  get  it, 
but  mark  what  I  tell  you,  that  perhaps  not  the  next  legislature,  but  the  third 
one,  he  will  be  in. 

Me.  Gander:     The  act  in  the  State  of  Minnesota  includes  the  farmer. 

Me.  Boyd:  Do  you  mean  Wisconsin?  They  have  no  compensation  Act  in 
Minnesota  ? 

Me.  Gandeb:  They  have  a  Bill  that  is  pretty  well  ready  to  go  before  the 
House  now. 

Ah:.  Boyd:  What  they  have  done  during  the  last  six  months  I  don't  know. 

Tin.  Commissionee:  What  do  you  think  of  a  case  of  this  kind,  Mr.  Boyd?  A 
small  employer  of  labour,  say  a  carpenter,  works  at  the  bench  beside  his  workmen. 
He  is  injured,  possibly  by  the  carelessness  of  one  of  his  men.  What  reason  is 
there  that  he  should  be  excluded  from  the  benefits  of  such  an  act  ? 

Me.  Boyd:  Well,  as  I  say,  we  just  drew  a  limit  where  experience  had  shown 
ii  was  wise.  In  launching  a  big  scheme  you  have  to  draw  the  line  somewhere  in 
order  to  inaugurate  it. 

Tin  I  o  missione!;:  [s  there  any  reason  why  that  man  in  that  shop  should 
■  be  insured? 

Mi;.  Boyd:  No,  no  reason  whatever. 

Tin    <  o  [MIS8IONEE:   [s  there  not  some  law  of  that  kind? 

All;.  Weoenast:  The  Washington  Act  allows  them  to  come  in  voluntarily. 

Mi;.  Boyd:  Our  recommendations  were  that  any  employer  could  come  in 
voluntarily,  or  come  in  himself,  but  inadvertently  that  was  omitted. 

The  <'m\i  :   Now,  this  leaving  of  the  common  law  liability  upon  an 

iployeT  who  by  his  wilful   or   malicious   negligence,  as  you  have  expressed  it, 

the   injury,  to  whom   does  that  extend?     Take  the  case  of  a  joint  stock 

company  thai  is  running  a  business,  the  International  Harvester  Company,  if  you 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  33Q 

like.     What  is  to  be  understood  by  the  employer  as  applying  'to  that  company? 
Docs  it  mean  the  company  itself  or  its 'directors,  or  the  superintendent  in  charge? 

Mi;.  Boyd:  The  superintendent.. 

The  Commissioner:  You  do  not  say  so  in  so  many  words. 

Me.  Boyd:  It  is  left  to  the  Board  to  determine. 

The  Commissioner:  There  will  be  a  great  deal  of  work  for  this  Board  to  do 
if  you  have  left  it  free  and  easy  like  that.  You  see  one  of  the  troubles  is  about 
these  corporations  that  we  have  no  such  doctrine  here  as  the  vice-principal.  That 
gets  over  a  good  many  difficulties  on  your  side,  but  the  general  manager  of  the 
company  is  a  fellow  servant  just  as  much  as  the  man  that  carries  the  lead  or  the 
iron  in  a  foundry. 

Me.  Boyd:  Well,  of  course  with  us  it  is  defined.  That  provision  was  put 
in  there  as  a  compromise  in  this  matter,  of  the  right  to  sue  also,  and  I  thought 
that  it  ought  to  be  in  the  statute  which  is  called  the  Factory  and  Workshop  In- 
spection Act,  a  regulation  regarding  the  machinery  and  the  operation  of 
machinery. 

Me.  Wegenast  :  You  thought  the  employer  should  be  got  after  in  that  way  ? 

Me.  Boyd:     Yes,  but  they  insisted  on  something  of  that  kind  in  this  act. 

The  Commisstonee  :  Is  the  Washington  Act  not  better  than  yours,  that  when 
an  accident  happens  owing  to  failure  to  comply  with  the  provisions  of  any  act 
or  ordinance  the  employer  pays  so  much  into  the  fund,  instead  of  making  him 
liable  according  to  the  common  law? 

Me.  Boyd:  That  is  what  I  recommended,  but  in  this  compromise  they  goi 
it  in  in  that  shape. 

Me.  Wegenast:  They  did  not  want  to  be  deprived  of  the  right  of  trial  by 
iury. 

Me.  Boyd:  There  would  not  be  one  case  in  10,000.  Supposing  a  man  that 
is  killed  has  been  earning  $3  a  day.  Two-thirds  of  that  is  $2  a  day,  or  $12  a 
week.  Now,  he  gets  $3,400,  and  $150  for  doctor's  bills.  He  is  going  to  sue 
an  employer,  we  will  say,  who  neglected  to  put  a  guard  on  a  saw.  He  is  going  to 
sue  the  employer  at  common  law  and  deny  himself  any  possibility  of  getting  any- 
thing under  the  Compensation  Act,  and  stake  his  chances  on  that,  and  divide  up 
with  his  attorney,  and  the  jury  might  allow  him  $5,000  or  $6,000.  With  us  it 
is  usually  $4,000  or  $5,000.  Then  it  goes  up  through  the  Circuit  Courts,  and  to 
the  Supreme  Court  and  back,  if  the  verdict  is  large.  He  never  would  do  it  in 
the  world. 

Me.  Wegenast:  That  is  your  average  verdict  in  cases  of  that  kind.  I  think 
Mr.  Emery  stated  somewhere  that  the  basis  of  assessment  of  damages  in  the 
"United  States  is  uniformly  very  much  higher  than  in  this  country,  and  about 
twice  as  high  as  in  England. 

Me.  Boyd:  You  will  find  that  in  the  statistics  of  our  investigations,  on  page 
40  of  the  brief. 

Me.  Wegenast:  And  you  base  the  limitation  of  $3,400  on  what? 

Me.  Boyd:  We  took  the  fifteen  best  cases  out  of  370  in  Cleveland. 

Me.  Wegenast:     Do  you  think  that  is  a  fair  way  of  getting  at  it? 

Me.  Boyd:  Well,  it  should  not  be  higher  than  that.  The  employers  said  we 
will  stand  for  that  in  order  to  get  rid  of  this  litigation. 

Xow,  as  to  the  cost  of  the  act.  It  is  figured  that  the  act  will  cost  from  two 
to  three  or  four  times  as  much  as  it  now  costs  the  employers  in  the  State  of  Ohio. 


340 


MINUTES  OF  EVIDENCE:  No.  65 


That  is  assuming  that  all  the  waste  in  the  liability  insurance,  and  the  hiring  of 
attorneys,  and  what  liability  companies  keep  as  over  against  what  they  actually 
pay  out,  that  all  to  go  in  together,  and  then  multiply  it  by  two. 

Mr.  Wegenast:  Then  to  compare  the  corresponding  benefits  under  a  system 
where  the  liability  is  thrown  on  the  employer  individually,  how  much  do  you  think 
your  rates  would  be  increased  over  what  they  are?  Supposing  you  had  a  system 
like  the  British  Act,  where  each  employer  insures  voluntarily,  how  much  more 
would  it  cost  ? 

Mr.  Boyd  :  Well,  I  don't  know.  Of  course  in  our  act  the  employee  contributes 
ten  per  cent,  of  what  the  employer  does.  That  is  considerably  more  than  ten  per 
cent,  of  the  entire  cost,  because  the  cost  of  administration  will  be  somewhere  be- 
tween ten  and  twenty  per  cent. 

Mr.  Wegenast  :  Do  you  think  it  would  be  as  high  as  that  ? 

Mr.  Boyd:  I  think  it  is  about  twelve  per  cent. 

Mr.  Wegenast:  In  Germany  they  have  it  down  to  about  four  and  a  half  per 
cent. 

Mr.  Boyd:  But  they  do  not  pay  all  the  costs  of  administration.  I  think  it 
will  be  reduced  to  between  ten  and  twelve  per  cent,  after  five  or  six  years. 

Mr.  Wegenast  :  I  am  stating  in  my  brief  that  it  will  take  about  twice  as  high 
a  rate  under  an  individual  liability  system  as  it  would  under  an  insurance  system, 
basing  my  statements  on  statistics  in  England.  Have  you  anything  which  will 
confirm  that,  or  otherwise? 

Mr.  Boyd  :  I  would  not  like  to  make  a  statement  off-hand  now.  We  have  gone 
into  that  pretty  carefully,  but  I  do  not  carry  the  figures  in  my  mind.  If  you 
write  to  Mr.  E.  E.  Watson,  State  Liability  Board  of  Awards  at  Columbus,  he  will 
give  you  all  the  information  on  that.  He  has  got  the  best  information  there  is  in 
the  country.    Have  you  read  Part  III.  of  this  report? 

Mr.  Wegenast:  Not  through.     I  have  looked  through  it. 

Mr.  Boyd:  You  will  find  something  in  that. 

The  Commissioner:  I  have  no  doubt  you  have  read  the  criticism  of  the 
Washington  Act.  I  have  just  forgotten  the  man's  name.  One  of  his  objections  is 
that  it  will  tend  to  make  men  more  careless,  and  that  the  careful  man  is  no 
better  off  than  the  careless  man. 

Mr.  Boyd:  Of  course  we  went  into  that  as  thoroughly  as  we  could,  and  we 
finally  came  to  the  conclusion  that  the  employee  contributing  from  ten  to  twenty 
per  cent,  where  he  was  given  total  disability  as  long  as  it  lasted,  that  that  was  the 
best  possible  arrangement  we  could  make  to  start  the  proposition. 

I  i  iv  to  your  Lordship  that  a  lot  of  these  people  get  up  and  write  some- 

ising  some  act  or  other  who  have  not  spent  perhaps  one  week  or  two 

u"  olid  study  on  it,     Now,  what  does  that  amount  to?     It  takes  a  man  at 

-iv  months  to  learn  very  much  about  it.  and  if  he  studies  it  two  years  he  will 

nov.  oirl  it  than  he  did  at  the  end  of  six  months,  and  it  is  idle 

,"  I  !i"')  t<»  a  man's  criticism  unless  he  is  a  thorough  student  of  the 

'in. 

Tin  [issiONER:  Such  a  criticism  as  that  even  on  the  surface  contains 

evidence  of  it.    That  is  a  thing  that  does  not  require  much  study,  does  it,  to  de- 
mine  what  your  opinion  would  he  as  to  whether  the  effect  would  be  to  make  an 
employee  earoless. 

Mi;.  Boyd:  Well,  you  will  find  this  in  Part  IT.     There  are  one  or  two  who 
afraid  thai  people  will  have  their  fingers  and  Viands  out' off  by  the  score  under 


1912  WOBKMEN'S  COMPENSATION  COMMISSION.  341 
\ 

an  industrial  insurance  act,  as  they  were  under  the  old  common  law  arrangement 
of  insurance.  Well,  that  is  not  so.  Accidents  per  thousand  employees  in  Germany 
and  France,  and  even  in  England,  are  much  less  now  than  they  used  to  be.  There 
is  nothing  in  the  argument  at  all.     It  is  mere  guess  work. 

The  Commissioner:  There  was  another  objection  made,  that  a  man  with  a 
high  wage,  leaving  a  wife  and  one  child,  that  his  family  would  not  get  any  more 
than  a  much  lower  paid  man  who  was  killed  who  had  three  or  four  or  five 
children. 

Mr.  Boyd  :  Well,  I  think  our  act  is  slightly  defective  in  providing'  an  analysis 
of  the  compensation  to  dependent  children.  Our  act  simply  provides  that  the 
dependants  of  the  man  killed  get  from  $1,500  to  $3,400,  but  the  German  Act,  for 
example,  and  the  Eussian  Act,  and  the  French  Act,  and  all  other  acts,  and  your 
Lordship  will  find  in  Part  I.  all  the  acts  from  civilization  down — you  will  find 
the  scales  of  compensation  in  those  cases  in  there.  For  example,  the  German  Act 
and  the  Eussian  Act  provides  the  widow  gets  twenty  per  cent,  of  it,  and  the  first 
child  gels  twenty  per  cent.,  and  the  second  child  gets  twenty  per  cent.  That  would 
make  sixty  per  cent.  Then,  if  there  were  more  children,  it  would  be  divided  up 
so  that  the  total  would  not  exceed  sixty  per  cent.  That  is  a  more  just  way, 
but  it  might  have  taken  two  weeks  longer  to  have  hammered  that  through  the  heads 
of  some  of  the  Commission.  I  tried  to  get  it  through  Smith's  head,  and  he  couldn't 
get  it  through,  and  we  did  not  want  to  defeat  the  Bill  just  because  we  could  not 
get  that  simple  provision  through  Smith's  head.  We  wanted  the  act  ready  before 
the  Constitutional  Convention  was  pulled  off. 

The  Commissioner  :  Will  the  effect  of  such  an  act,  in  increasing  the  burden 
upon  the  employer,  have  any  effect  in  keeping  old  men  out  of  employment? 

Mr.  Boyd  :  I  think  not.  We  discussed  that,  and  the  employers  discussed  it, 
the  most  intelligent  employers  in  Cleveland,  I  think.  They  said  we  are  willing  to 
pay  four  times  as  much,  or  even  five  times  as  much,  to  get  rid  of  this  old  wrangle 
between  the  employers  and  the  emploj^ees.  Now,  one  gentleman  from  Brookfield,  I 
think  it  was,  said,  I  don't  take  any  stock  in  this  argument,  because  Ohio  will  have 
such  a  Compensation  Act  and  Indiana  does  not,  that  the  employers  of  Indiana  will 
be  at  a  great  disadvantage  as  against  the  employers  of  Ohio.  He  said  that  is  all 
rubbish  and  nonsense;  and  Kilbourn  of  Columbus  said  the  same  thing. 

The  Commissioner:  With  what  arguments  did  he  back  that  up? 

Mr.  Boyd:  Well,  he  said  the  competent  workman  would  tend  to  go  where  he 
could  get  the  best  consideration,  and  five  good  workmen  as  against  seven  poor 
workmen  would  do  more  work. 

Mr.  Wegenast:  Do  you  think,  Mr.  Boyd,  that  a  man  would  go  to  a  State 
where  he  got  $2.50  a  day  with  a  good  Compensation  Act,  in  preference  to  a  State 
where  he  got  $3  a  day  with  a  poor  Compensation  Act? 

Mr.  Boyd  :  I  think  that  is  almost  true.  Now,  in  Germany,  when  they  were 
inaugurating  the  scheme,  they  never  asked  whether  France  or  Holland  or  Bussia 
was  going  to  do  it;  they  did  it  not  on  grounds  of  sentimentality,  but  on  grounds 
of  sound  and  wise  statesmanship.    That  is  what  they  did  it  for. 

Mr.  Wegenast:  Did  you  have  any  opposition  on  the  part  of  the  employers' 
liability  companies? 

Mr.  Boyd:  Oh  yes.  We  had  a  room  twice  as  big  as  this,  and  the  walls 
lined  with  liability  insurance  men-     We  had  fifteen  there  one  night. 

Mr.  Wegenast:  I  suppose  you  have  read  the  addresses  and  compilations  by 
Mr.  P.  Tecumseh  Sherman? 


342 


MINUTES  OF  EVIDENCE:  Xo.  65 


Me.  Boyd:  Xo.  There  are  a  lot  of  parlour  orators  who  disuss  the  Work- 
Compensation  Act,  who  never  go  anywhere  and  never  do  anything. 
You  don't  require  very  much  investigation  to  know  that  is  true.  At 
:he  Convention  of  the  Xational  Economical  Society  they  had  a  great  number 
of  parlour  orators,  and  a  few  hard-headed  people  who  were  willing  to  study  the 
thing  out  and  take  a  step  and  stand  on  it.  If  Mr.  Wainwright  had  insisted 
upon  an  insurance  act  they  would  have  had  it  in  Xew  York  State,  and  the  State 
would  have  held  it  constitutional,  and  they  would  have  had  the  act  in  effect. 

Mi;.  Wegenast:  There  is  a  series  of  addresses  being  distributed  by  the 
Xational  Civic  Federation. 

Mr.  Boyd:  They  are  mostly  made  up  of  parlour  orators.  I  do  not  wish  to 
mention  any  names,  but  I  was  there  in  December  of  1910,  and  they  were  all  on 
the  water  wagon.  They  said  it  is  an  insurance  scheme,  and  the  courts  will  never 
sustain  it.  That  is  what  Parker  said  in  the  Chicago  Conference;  and  Davy  of 
Boston,  the  Chairman  of  the  Committee  of  Ten  on  uniform  State  laws  in  the 
United  States,  took  the  same  position;  but  they  took  the  Ohio  Bill  down  in  Massa- 
chusetts and  drew  the  Massachusetts  Bill  right  after  it  with  one  exception,  and 
that  is  they  allow  the  liability  insurance,  people  to  get  their  hands  into  the  business, 
by  allowing  the  employer  to  contract  out  of  it. 

Me.  Wegenast  :     To  form  separate  schemes. 

Mr.  Boyd:  Yes.  That  is  it  lets  the  liability  insurance  companies  do  the 
business. 

Mr.  Wegenast:     To  let  them  down  easy. 

Mr.  Boyd:     Yes. 

Mr.  Wegenast:  Is  it  anticipated  they  will  continue  in  business  for  any 
length  of  time? 

Mr.  Boyd:  I  don't  know  about  that. 

Mr.  Wegenast:  Have  you  seen  this  book,  Mr.  Boyd?  It  consists  of  ad- 
dresses by  representatives  of  the  Liability  Companies  at  the  Fifth  Annual  Meeting 
of  the  Liability  Insurance  Association. 

Mr.  Boyd:     Xo,  I  haven't  read  this. 

Tin-:  Commissioner:  What  were  the  arguments  that  these  Liability  Com- 
panies urged  against  the  passing  of  the  Workmen's  Compensation  law? 

Me.  Boyd:  Xo  argument,  except  they  wanted  to  continue  doing  business. 
For  instance  I  met  one  man  and  he  wanted  to  see  the  rate  being  charged  in  the 
Washington  Act.  I  gave  it  to  him,  and  then  he  said  under  that  provision  of  our 
Ad  where  the  employee  might  sue  in  case  the  employer  was  guilty  of  violating 
some  inspection  Ad  provision  it  would  cause  a  large  number  of  cases.  Their 
whole  argument  is  that  it  will  affect  a  large  number  of  cases,  or  cover  a  large 
Dumber  of  cases.     Thai   is  the  sole  argument  now. 

Mi;-  Wegenast:  So  there  would  lie  -till  a  necessity  of  insuring  against  that 
liability. 

'I'm;  Commissioner:     There  would  not  be  if  the  man  obeyed  the  law. 

Mr.    Boyd:     II    is   a    question    of   whal    practically   will    take   place.     Every 

Mian  know-  what   he  is  going  to  do  if  he  has  go1   a  cinch  on  $3,400  and  the 

bill.     Everybody  knows   whether  he  will  go  over  to   Charles   Thatcher's 

office  and  mlcr  int.,  a  written  contract  to  give  him  from  20  to  50  per  cent,  of  all 

get,  and   drop  any   right  he  has   in  $3,400,  and   $150  doctor's  bill.       He 

never  will  do  it. 

Tin:  COMMISSIONER:     What    do  yon   do  with   non-resident  dependants? 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  343 

> 

Mr.  Boyd:  Well,  we  recommended  them  to  get  half.  I  think  they  are 
treated  the  same.     It  is  either  half  or  the  whole- 

MR.  Wegenast:     Whether  they  live  in  the  United  States  or  not? 

Mr.  Boyd:     Yes.     It  is  either  the  half  or  the  whole. 

The  Commissioner:  Upon  what  logical  ground  do  yon  defend  putting  them 
on  any  different  footing? 

MR.  Boyd:  Well,  they  live  under  different  wage  conditions.  For  example, 
if  they  are  supporting  children  abroad  they  are  not  a  part  of  the  community  and 
do  not  shoulder  any  of  the  responsibilities,  and  the  man  working  here  gets  66  2-3 
per  cent,  of  a  higher  wage,  while  in  Austria  he  would  get  50  or  60  per  cent,  of 
a  lower  wage. 

Mr.  Beuce  :  Does  the  Ohio  Act  recognize  non-resident  dependants  in  another 
State  ? 

Me.  Boyd:  They  recognize  non-resident  dependants  in  any  country  in  the 
world,  either  half  or  the  whole.     I  recommended  half. 

The  Commissioner  :  If  the  principle  of  your  act  is  that  justice  demands 
that  the  employee  should  be  protected  to  this  extent,  that  is  one  of  his  rights, 
why  should  the  flag  he  lives  under  make  any  difference? 

Mr.  Boyd:  Well,  if  what  I  said  is  no  reason  then  there  isn't  any  reason. 

The  Commissioner:  I  could  understand  it  as  based  upon  what  you  said. 
The  real  principle  is  it  is  for  the  benefit  of  the  community  of  your  State. 

Mr.  Boyd  :  The  legal  basis  of  the  act  is  the  protection  of  the  health,  safety 
and  general  welfare  of  the  public  in  our  State. 

The  Commissioner:     Then  I  can  understand  the  logic  of  that. 

Mr.  Boyd:  There  is  no  use  putting  a  premium  on  people  residing  here  and 
supporting  their  children  abroad. 

Mr.  Watts:  Suppose  you  have  the  case  of  a  workman  in  Ohio  who  is  a 
Macedonian,  but  capable  of  earning  just  as  much  as  an  American,  and  he  is 
killed.  He  has  a  family  living  in  Macedonia,  and  they  are  maintained  in  Mace- 
donia for  probably  half  what  they  are  here.  Now,  those  dependants  are  the 
heirs  of  that  man  who  is  killed,  and  they  are  entitled  to  whatever  is  awarded  to 
him.  Now,  do  you  regard  the  full  amount  and  pay  it  to  them,  and  if  you  do 
how  do  you  do  it,  weekly  or  monthly? 

Mr.  Boyd:  Monthly.  They  are  allowed  either  half  or  the  whole.  I  am 
not  just  sure  of  how  the  act  is.  My  memory  is  there  is  no  discrimination.  There 
were  a  few  things  in  the  Bill  as  finally  passed  that  I  do  not  remember,  and  I 
would  have  to  look  it  up. 

Mr.  Wegenast:  Would  not  the  fact  of  the  non-resident  dependants  being 
recognized  in  your  State,  and  not  being  recognized  in  another  State,  constitute 
an  unfair  disadvantage  and  discrimination? 

Mr.  Boyd:  Well,  there  would  be  some  slight  discrimination  there,  but  the 
general  tendency  will  be  in  my  opinion  to  give  them  something. 

The  Commissioner:  It  was  held  that  what  we  call  Lord  Campbell's  Act, 
that  first  gave  the  right  in  fatal  accidents  to  recover,  did  not  apply  to  the  foreigner 
killed  within  the  jurisdiction,  but  that  was  reversed  by  the  House  of  Lords. 
They  held  that  the  foreigner  was  just  as  much  entitled  to  the  benefit  of  that  act 
as  a  subject  of  the  Crown. 

Mr.  Wegenast  :  Do  you  anticipate  any  difficulty  in  finding  out  whether  there 
are  really  dependants,  and  who  they  are? 

Mr.  Boyd:  Well,  that  was  an  objection  that  was  raised  to  giving  them 
anything. 


344  MINUTES  OF  EVIDENCE:  No.  65 


Mb.   Wege.vast:     For  instance  the   Chinese? 

Me.  Boyd:  Not  only  that,  but  as  to  the  just  distribution  amongst  them, 
and  whether  they  would  ever  get  any  of  it.  Even  their  own  parents.  They  have 
great  difficulty  sometimes  in  getting  the  money  to  them,  especially  amongst  the 
ignorant  people. 

Mr.  Wegenast:     There  was  one  feature  I  would  have  liked  you  to  have  gone 
into  a  little  more  at  length.    You  appear  to  anticipate  under  your  act  there  will 
be  formed  something  in  the  nature  of  the  employers'  associations  of  Germany? 
Mr.  Boyd:     Something  of  that  kind. 

Mr.  Wegenast:     You  do  not  afford  any  facilities  in  the  act  for  it? 
Mr.  Boyd:  The  act  is  left  so  that  it  can  be  attached  to  it. 
Mr.  "Wegenast:     Then  what  do  you  expect  these  associations  to  do?     What 
will  be  their  scope? 

Mr.  Boyd:  That  will  depend  on  the  intelligence  with  which  they  manage 
their  business. 

Mr.  Wegenast:  Do  you  expect  they  will  have  any  influence  in  the  matter 
of  prevention  of  accidents? 

Mr.  Boyd:     Yes,  great  influence. 

Mr.  Wegenast:  Do  you  expect  they  will  appoint  inspectors  and  expert 
draftsmen  of  machinery? 

Mr.  Boyd:  There  is  no  question  they  will. 

Mr.  Wegenast:  In  that  case  then  would  it  not  be  better  to  have  the 
industries  classified  according  to  the  industries  rather  than  according  to  the 
hazard  of  risk?     You  remember  the  allusion  to  that  this  morning? 

Mr.  Boyd:  Well,  in  the  course  of  two  or  three  or  five  or  six  years  we  will 
have  over  a  million  workmen,  and  employers  of  over  a  million  workmen.  Now,  it 
will  not  do  to  try  to  manufacture  too  many  details  in  the  launching  of  the  scheme. 
What  the  workmen  want  is  the  recognition  of  a  new  remedy  within  reasonable 
limitations,  and  then  a  rational  extension  of  it. 

Mi;.  Wegenast:  I  was  thinking  of  what  would  likely  happen  in  the  future. 
Mr.   Boyd:     I   think  they  will   follow   almost   identically   the   steps   of   the 
German  plan. 

1  would  like  to  add  this.     Just  think  of  it.     They  have  demonstrated  that  act, 

all  fit'  it.  for  twenty-four  years,  and  the  number  of  workmen  under  it  has  increased 

from  3,000,000  to  over  27,000,000  in  1908,  and  they  never  have  changed  one  figure 

in  the  scale,  but  they  have  constantly  changed  the  administrative  features  of  the 

Thai   is  constantly  changing.  They  got  together  and  agreed  upon  this  scheme 

has    never   been   changed    in   twenty-four  years.        That   shows   from   the 

poinl   of  statesmanship  they  got  it  fairly  accurate,  or  there  would  have  been 

constant  changes. 

Mi;.  W  r:     Then  you  think,  Mr.  Boyd,  it  is  not  necessary  in  order  to 

work  out   the  principles  of  the  German  Act  to  have  these  voluntary  associations 
thai  existed  before  the  German  Act  was  passed. 
Mi;.  Boyd:     No. 

Mi;.  Wegen  vst:     You  anticipate  the  voluntary  association  part  will  be  worked 
out  voluntarily  as  ;i  result  of  (be  net? 
Mi..  Boyd:    Yes. 

'I'm  r  Commissioner:     T  suppose  it  is  not  expected  that  these  bodies  would 
any  more  than  advisory  ? 
Mi;.  Boyd:     Well,  it  will  be  up  to  the  employers  largely  to  adjust  that  matter. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  345 


Mr.  Wegenast:  For  instance  if  the  employers  in  the  woodworking  industry 
were  classified  with  the  employers  in  the  agricultural  implement  industry  and  they 
came  to  the  conclusion  the  class  should  be  divided  it  would  be  divided? 

Me.  Boyd:  It  would  be  divided.  They  would  simply  bring  in  a  recommend- 
ation to  the  legislature,  and  the  workmen  could  not  have  any  objection. 

The  Commissioner  :     I  thought  the  Board  would  have  power. 

Mr.  Boyd:  It  would  be  under  our  act.  All  wc  have  to  do  is  induce  the 
Board  to  do  it,  and  no  doubt  the  Board  would  do  it. 

Mr. Wegenast  :  Do  you  think  that  would  be  better  than  to  have  it  arbitrarily 
fixed  by  the  legislature? 

Mr.  Boyd  :  I  do,  yes.  You  are  more  highly  developed  here  in  the  matter  of 
operating  through  Commissions  than  we  are,  and.  the  population  of  the  Province 
is  not  so  great. 

Mr.  Bancroft:  Your  population  will  grow  up  in  the  meantime  and  the 
efficiency  of  your  Commission  will  grow. 

The  Commissioner:  I  should  doubt  if  an  act  that  left  it  entirely  to  the 
Board  to  start  the  scale  would  be  satisfactory. 

Mr.  Boyd:  It  is  an  awkward  proposition. 

The  Commissioner:  The  Washington  people  evidently  got  their  experts 
to  work  and  they  put  it  in  the  act,  and  you  waited  until  after  the  act. 

Mr.  Boyd:  That  question  will  be  answered  when  you  get  the  Ohio  actuaries' 
scale.  You  will  find  it  very  different  from  the  Washington  scale,  but  they  have  got 
to  go  to  the  legislature  to  change  the  rates.  The  Board  can  do  it  whenever  the 
employers'  associations  show  them  it  ought  to  be  done. 

The  Commissioner  :     I  do  not  think  it  would  be  necessary  to  go  back. 

Mr.  Boyd:     Can  they  change  the  rate,  for  instance? 

Mr.  Bancroft  :  If  the  expense  exceeds  the  revenue  they  can  raise  the  rate  to 
meet  it. 

The  Commissioner:  "If  after  this  act  has  gone  into  operation  it  is  shown 
by  experience     .     .     .     any  establishment  or  work  is  unduly  dangerous." 

Mr.  Boyd:  You  see  they  put  the  rates  right  into  the  act,  and  they  say  in 
such  a  class  of  employment  the  rate  is  thus.  Well,  of  course  the  Board  cannot 
change  the  law. 

The  Commissioner  :  It  would  be  very  easy  to  have  a  law  which  started  with 
a  schedule,  and  giving  the  Board  power  to  change  it  from  time  to  time. 

Mr.  Boyd:     Yes,  that  would  be  the  same  as  we  have. 

Mr.  Bancroft:     What  does  this  scale  mean?     Take  "powder" 

Mr.  Boyd  :     That  means  they  charge  $10  a  hundred  on  the  pay-roll. 

The  Commissioner:  It  would  not  look  like  that  to  the  ordinary  casual 
reader. 

Mr.  Boyd  :     I  wrote  him  and  found  out  about  that. 

The  Commissioner:     .035  means  what? 

Mr.  Boyd:     $3.50  a  hundred. 

Mr.  Wegenast:  I  have  a  letter  here  from  the  manager  of  one  of  the  large 
lumber  companies  in  Seattle,  and  he  says,  "  On  account  of  my  previous  experience 
as  outlined  above  I  was  somewhat  opposed  to  the  State  Compensation  Act  as  they 
had  contemplated  a  cost  of  seven  and  a  half  per  cent,  on  the  pay-roll.  However, 
we  were  able  to  get  an  amendment  which  made  the  two  and  a  half  a  balance,  and 
made  the  subsequent  assessments  cover  only  actual  losses  paid  out."  So  there  must 
be  power  to  reduce  that  rate,  and  I  think  I  remember  a  section  there  by  virtue  of 
which  it  was  done. 


346 


MINUTES  OF  EVIDENCE:  Xo.  65 


Me.  Boyd:  His  Lordship  first  referred  to  a  section  where  if  they  discovered 
some  new  character  as  to  the  hazard  of  an  employment  they  could  change  it. 

The  Commissioner:  That  is  a  particular  man  who  by  mismanagement 
increases  the  hazard  they  can  alter  his  classification. 

Me.  Doggett:  Under  the  act  of  the  State  of  Ohio  do  you  not  find  that  the 
employers  who  are  employing  more  than  five  individual  workmen,  who  are  within 
the  act,  have  a  preference  over  the  employers  who  do  not  come  within  the  act? 

Me.  Botd  :  I  don't  know  really  how  that  would  be.  We  had  to  draw  the  line 
somewhere  in  order  to  start  the  act  off,  and  unfortunately  they  omitted  to  provide 
that  employers  of  four  or  fewer  men  might  voluntarily  come  under  the  Act. 
In  Toledo,  for  example,  there  are  fifteen  or  twenty  who  employ  only  three  or  four 
men  who  would  like  to  come  in  voluntarily.  An  amendment  will  be  made  a  year 
from  this  January. 

Mr.  Doggett  :  There  must  be  thousands  in  the  State  of  Ohio  who  are  not 
within  the  scope  of  that  act, 

Mr.  Boyd  :     Do  you  mean  carpenters  ? 

Mr.  Doggett:  Carpenters  and  sheet  metal  workers  and  such  like.  In  the 
city  of  Toronto,  for  instance,  there  are  hundreds  of  so-called  contractors  who 
are  employing  sometimes  four  and  sometimes  three,  and  sometimes  they  have  no 
work  on  at  all. 

Me.  Boyd:     The  "Wisconsin  Commission  recommended  four  or  more. 

The  Commissioner:     What  objection  is  there  to  having  no  limitation? 

Mr-  Boyd:  I  have  stated  that  several  times.  In  Ohio  it  would  be  impossible 
to  launch  the  act,  and  look  at  the  abuses  which  would  arise,  these  ambulance 
chasers,  and  all  these  people.  Every  Polish  woman  that  had  a  little  accident  in  a 
laundry,  the  employer  would  not  know  about  the  act  and  would  not  be  insured 
under  the  act  but  his  defences  would  be  gone,  and  there  would  be  just  a  stack  of 
litigation  of  that  kind. 

Mi;.  Wegi-xast:  A  man  is  not  insured,  or  his  men  are  not  insured,  until 
he  gets  his  receipt?     He  has  got  to  pay  his  premium  first? 

Mr.  Boyd:     Yes. 

Mr.  Wegexast  :     Then  what  happens  if  he  is  not  insured  ? 

Mr-  Boyd:     In  case  a  workman  is  hurt  all  his  defences  are  gone.     He  has 

inly  nothing  to  do  but  to  prove  he  was  at  fault.     I  advised  with  a  great  many 

attorneys  who  had  experience  of  forty  years  in  defending  corporations,  and  they 

said  that  the  removal  of  all  the  common  law  defences  would  drive  them  all  in. 

tically.  Thai  is  a  question  of  judgment  as  to  what  the  penalty  should 
be.  The  workmen  can  see  there  ought  to  be  a  reasonable  penalty,  and  that  was 
voted  on  unanimously  by  the  representatives  of  labour  and  the  employers. 

Tii!:  COMMISSIONEE :  I  did  not  quite  follow  your  answer  to  my  question  as  to 
why  the  ad  did  no1  apply  to  every  case  in  which  one  man  was  employed  by 
another. 

Mi;.    Boyd:     Well,   we   simply  concluded   first  from  the   experience   of   other 

counti  These    European    countries,    mosl    of   them,   started,  off  in   that   way. 

Germany   3tarted  off  in   making  their  act  applicable  to  five  or  more.     Then  we 

wanted  to  guard  againsl  the  difficulties  that  would  arise  in  launching  the  act. 

Tin    COMMISSIONEE :     You   wauled   to   feel   your  ground? 

Mi;.    Boyd:     You    will    notice    in    my    brief    what    the    Supreme    Court    says 

aboul  that.     This  gentleman.  Mr.  Doggett.  raised  the  question  a<  to  the  unfairness 

to  the  workmen  working  where  then   were  three  or  four.    There  the  court  justified 

hal   elimination  as   being  a    reasonable  elimination,  because  where  five  or  more 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  347 

men  are  employed  there  is  more  danger  than  there  would  be  where  there  were  two 
or  three  men  employed,  and  where  there  are  only  two  or  three  men  employed 
they  have  a  chance  to  know  more  about  each  other  than  where  there  are  ten  em- 
ployed, and  we  have  that  principle  established  in  the  regulation  of  mines. 

The  Commissioner:  We  have  it  in  our  Factory  Act,  I  think.  I  think  it  is 
five. 

Mr.  Wegenast:  In  the  Washington  Act  they  lapse  a  payment  or  two,  ap- 
parently. 

The  Commissioner:  The  changing  of  these  rates  can  only  be  done  by  the 
legislature. 

Mr.  Boyd:  The  Board  can  do  it  with  us.  They  make  the  employer  pay  it  in 
advance,  and  for  example,  if  they  have  made  the  rate  too  high  on  an  employer  they 
adjudicate  that  in  the  next  premium. 

The  Commissioner:  Why  do  you  not  make  the  workman's  right  of  com- 
pensation commence  at  once,  whether  the  man  pays  it  or  not.  It  is  sure  to 
come  in. 

Mr.  Boyd:  Well,  the  proof  is  whether  a  man  is  entitled  for  one  day  or 
two  days- 

The  Commissioner:  I  do  not  mean  that.  I  understand  you  to  say  the 
workman  is  not  insured  until  the  premium  is  paid  by  his  employer. 

Mr.  Boyd:     Yes. 

The  Commissioner:  Why  could  you  not  abandon  that  feature,  because  it 
is  sure  to  be  paid?  Why  should  a  workman  not  be  insured  from  the  beginning? 
Mr.  Boyd:  If  you  put  it  in  that  form  and  he  fails  to  pay  then  the  workman 
is  not  paid- 

Mr.  Wegenast:     You  haven't  the  money  to  pay  him. 

The  Commissioner:  It  can  be  made  up  by  an  assessment.  It  is  just  put- 
ting the  employees  of  men  who  do  not  pay  promptly  in  a  hole. 

Mr.  Boyd:     Well,  we  make  a  penalty. 

The  Commissioner  :  But  that  does  not  help  the  workmen-  Supposing  the 
workman's  right  was  absolute  upon  the  fund  whether  his  employer  paid  or  not, 
what  objection  would  there  be  to  that,  because  from  the  body  of  the  employers 
you  would  get  the  money  eventually. 

Mr.  Boyd:  No,  you  wouldn't  unless  everybody  paid  his  pro  rata  share,  Hike 
fire  insurance. 

The  Commissioner  :     But  the  next  year  you  would  raise  the  rate  ? 

Mr.  Boyd:  That  would  not  be  just.  You  would  make  every  man  pay  in 
proportion  to  the  hazard  of  his  business- 

The  Commissioner:  If  you  want  to  get  at  improving  the  position  of  the 
great  body  of  workmen  do  not  leave  them  out  if  their  employers  do  not  pay  up 
to  date,  because  it  would  happen  every  year,  and  if  a  man  defaulted  for  a  week 
or  two  weeks  the  workmen  would  have  no  claim  upon  the  fund,  unless  the  Board 
in  its  discretion  allowed  it. 

Mr.  Wegenast:  Would  that  not  make  just  the  difference  between  a  State 
sj'stem  and  a  collective  system? 

The  Commissioner  :  I  do  not  see  why  if  such  a  system  were  adopted  there 
should  not  be  a  pro  rata  assessment? 

Mr.  Wegenast:  That  makes  the  difference  in  the  case  your  Lordship  sug- 
gests :  the  State  would  really  stand  behind  them. 


MINUTES  OF  EVIDENCE:  No.  65 


Commissioner:     The  State  would  only  temporarily  do  that.     I  don't 
care  what  you  call  it,  the  thing  is  what  you  do. 

Mr.  Doggett:  Supposing  I  am  a  carpenter  working  in  the  State  of  Ohio 
for  a  year  or  two  years,  under  the  present  act,  and  the  contractor  employs  over 
five  carpenters  and  we  are  all  insured  under  the  act,  and  I  get  fired  from  that 
employer  and  go  to  another  one  who  only  had  four  carpenters  working  for  him, 
and  I  met  with  an  accident.     Where  would  I  be? 

The  Commissioner:     Out  in  the  cold. 

Mr-  Doggett:     After    I  had  been  paying  for  years. 

Mr.  Wegenast:     You  are  not  paying  for  years  in  advance. 

Mr.  Gander:     If  he  paid  for  one  year  it  would  be  good  for  one  year. 

Mr.  Boyd:  Where  your  premium  is  based  upon  your  pay-roll,  why,  the  pay- 
roll is  the  measure  of  the  exposure  of  the  workman  to  injury,  isn't  it? 

Mi;.  Gander:     Yes. 

Mr.  Boyd  :  Then  if  your  premium  is  paid  based  upon  the  pay-roll  you  have 
covered  the  exposure. 

Mr.  Doggett  :  My  point  is  this,  Mr.  Boyd.  After  working  two  years  for  an 
employer  that  had  more  than  five  men  working  for  him  that  was  within  the  act, 
and  then  I  get  fired  and  work  for  a  contractor  with  less  than  four  men  and  I  have 
an  accident,  would  I  have  to  fight  that  emplo}rer  under  the  common  law  to  get 
compensation — under  the  Ohio  Act  I  mean? 

Mi;.  Wegenast:  Supposing  a  man  works  for  an  employer  of  five  men  or  more 
in  the  month  of  January,  and  the  assessment  is  then  paid,  say  on  the  basis  of  the 
pay-roll,  which  included  we  will  say,  Mr.  Doggett.  Then  Mr.  Doggett  leaves  that 
employer  and  goes  into  the  employ  of  a  man  who  does  not  come  under  the  insur- 
ance system,  his  insurance  is  paid  on  the  larger  man's  pay-roll,  but  he  doesn't 
get  it. 

Mr.  Watts:  His  insurance  is  not  paid  beyond  the  time  he  is  working.  The 
employers'  liability  insurance  companies,  for  instance,  collect  your  premium  on  the 
pay-roll.  They  do  not  pay  any  insurance  whatever  on  a  workman  who  may  be 
hurt  when  be  is  not  in  your  employ. 

The  Commissioner  :  Take  Mr.  Doggett's  case.  If  he  were  to  contribute 
ten  per  cent,  why  should  he  be  in  that  position? 

Mr.  Boyd:     He  just  contributes  ten  per  cent,  of  the  wages  that  he  earns. 

Tin;  Commissioner:     But  he  gets  no  insurance  for  it  in  the  case  put. 

Mi;.  Boyd:     He  didn't  get  any  because  he  didn't  pay  for-  any. 

Mr.  Doggett:     It  is  not  my  fault- 
Mi;.  BotU:     You  are  getting  across  the  line  of  practicability. 

'Iiii':  Commissioner:  Suppose  a  person  is  employed  with  Mr.  Smith  who 
i--  insured^  and  Mr.  Smith  deducts  the  ten  per  cent,  from  him,  if  that  is  the  law. 
Thru  months  he  goes  away  into  the  employment  of  Thomas  Jones  who  has 

(inly  three  men.     What  justice  would  there  be  in  leaving  him  without  any -remedy 
under  the  act  when  he' has  paid  for  insurance  for  the  year? 
Mi;.  Wegenast:     1  think  it  does  not  go  for  the  year. 

Tin:  Commissioner:  I  am  talking  of  the  scheme  of  this  act  which  does 
pay  for  the  year. 

Mi;-  Boyd:     No,  every  six  months. 

'I'm    Commi  a:     Under  the  Washington  Act  it  is  a  yearly  payment. 

Mi;.  Watts:  In  the  rase  of  Jones  you  are  not  collecting  anything  at  all. 
Jones  pays  nothing  and  therefore  the  workman  is  paying  nothing  during  that 
period. 


1912  WORKMAN'S  COMPENSATION  COMMISSION.  349 

The  Commissioner:  If  you  have  the  Washington  system  where  the  yearly 
payment  is  paid  in  advance,  and  you  have  as  Mr.  Boyd  recommends,  a  contribu- 
tion of  ten  per  cent,  taken  by  the  employer  from  his  employees,  that  amount  would 
have  paid  for  his  insurance  during  the  ensuing  year,  and  if  he  left  that  employ- 
ment and  went  into  the  employment  of  somebody  that  was  not  insured  he  would 
not  get  anything,  although  he  had  paid  his  ten  per  cent- 

Mr.  Watts:  .Suppose,  your  Lordship,  this  particular  case.  A  man  is  work- 
ing for  a  firm  in  the  month  of  December,  and  on  the  1st  of  January  you  put  this 
act  into  force.  He  works  for  that  firm  for  a  week.  The  act  goes  into  force 
on  the  1st  of  January  and  you  make  your  assessment  on  the  pay-roll  on  the  31st 
of  December,  and  that  man  was  on  the  roll  and  his  assessment,  such  as  it  was,  was 
collected,  but  perhaps  he  left  that  firm  in  the  first  week  in  January. 

The  Commissioner  :  That  is  a  payment  in  advance  for  insurance  for  the 
year  to  come  under  the  Washington  act. 

Mr.  Watts:     Not  on  the  individual.     It  is  on  the  total  pay-roll. 

The  Commissioner:  It  is  to  insure  all  the  workmen.  What  answer  is  that 
to  Mr.  Doggett?  The  employer  deducts  from  him  ten  per  cent,  of  what  he  has 
to  pay  in  respect  of  his  wages  on  the  basis  of  the  contribution-  When  he  goes 
into  the  employment  of  somebody  else  and  is  hurt  what  answer  have  you  got  for 
him  when  he  says,  "why,  I  paid  $2  or  $5  or  $10,"  whatever  it  was,  "for  insurance 
for  a  year,  and  why  won't  I  get  it?" 

Mr.  Watts  :  But  he  did  not  pay  $10  for  insurance  for  the  year.  If  he  had 
worked  for  the  year  previously  he  would. 

Mr.  Wegenast  :     It  depends  on  whether  you  view  it  as  a  payment  in  advance. 

The  Commissioner:     That  is  what  the  Washington  Act  says. 

Mr.  Wegenast:     There  is  a  temporary  difficulty  there. 

Mr.  Gander:  Do  I  understand  Mr.  Boyd  to  say  very  likely  it  would  be 
changed  to  include  men  who  employed  five  or  less? 

Mr.  Boyd:  I  think  the  next  legislature  will  make  it  elective  for  those  who 
employ  four  or  less,  and  ultimately  it  will  be  extended  to  include  practically 
everybody. 

Mr-  Gander:     That  will  cover  the  trouble  entirely. 

Mr.  Doggett  :  That  is  why  I  asked  Mr.  Boyd  if  he  did  not  think  under  that 
present  act  it  would  have  the  tendency  to  be  a  hardship  in  particular  trades,  in 
the  building  trade  for  instance.  Would  it  not  make  the  men  leave  the  employer 
who  had  only  four  men  working  and  go  to  the  employer  where  he  knew  he  would 
be  insured  and  come  within  the  scope  of  the  Ohio  Act?  The  reason  I  raise  that 
is,  it  is  a  very  vital  point  for  the  building  trades  to  consider.  I  know  for  a  fact 
in  our  own  trade  the  majority  in  this  city  have  in  the  neighborhood  of  three  or 
four  or  five  or  six  employers  in  one  year. 

Mr.  Wegenast:  You  would  like  to  have  the  elective  feature  included  in  the 
act.  You  would  want  the  man  who  employs  less  than  five  to  be  able  to  insure  if 
he  wanted  to? 

Mr.  Doggett:     Certainly. 

Mr.  Boyd  :     He  wants  more  than  that. 

Mr.  Bancroft  :     We  have  asked  for  compulsory  insurance. 

Mr-  Boyd  :  That  is  what  we  will  have  in  a  short  time,  but  we  didn't  put 
it  in  that  way  to  start.  You  have  got  to  get  a  start  made  and  get  somewhere 
first,  and  then  you  can  extend  it  as  far  as  public  sentiment  will  demand  it. 

Mr.  Doggett  :  There  is  another  case  might  come  up  under  your  present  act 
in  the  State  of  Ohio.     A  large  foundry,  for  instance,  in  one  of  your  leading  cities 


350  MINUTES  OF  EVIDENCE:  Xo.  65 

would  be  employing  a  large  number  of  foreigners  whose  dependants  would  be  living 
in  other  countries  or  other  States.  We  will  say  two  or  three  men  meet  with 
accidents  and  their  dependants  in  foreign  countries  would  receive  compensation,- 
and  we  will  say  there  are  some  American  citizens  working  for  American  contractors 
in  the  state  of  Ohio  who  get  hurt  and  their  dependants  do  not  receive  compensa- 
tion, and  therefore  the  dependants  of  foreigners  in  other  countries  will  receive 
compensation  under  the  State  law  of  Ohio,  and  a  citizen  of  the  State  of  Ohio 
who  has  perhaps  lived  there  all  his  life,  if  he  meets  with  an  accident -in  a  factory 
employing  less  than  five  individual  workmen,  would  not  receive  compensation  at  all. 

Mr.  Boyd:  Of  course  that  is  true.  Of  course  the  hazard  where  two  or  three 
persons  are  emplo}red  is  much  less  than  where  eight  or  ten  are  employed,  and  it  is 
only  a  cuiestion  of  expediency  for  a  short  time  to  get  the  scheme  going. 

Mr.  Gander:     How  long  has  this  act  been  in  working  order? 

Mr.  Boyd:  It  has  not  been  working  yet.  The  act  will  go  into  effect  just 
as  soon  as  the  rates  are  published  now,  perhaps  next  week. 

The  Commissioner  :  Do  you  know  Mr.  Moulton  of  Ishpiming,  Michigan. 
He  is  a  lawyer  who  has  drawn  a  Bill.     Is  there  a  Michigan  Bill? 

Mr.  Boyd:  There  is  a  Commission.  They  advised  with  me  about  starting 
up  the  work  of  the  Commission. 

Mr-  Wegenast  :     I  had  a  long  talk  with  Mr.  Smith  a  few  days  ago. 

Mr.  Boyd:  They  were  going  to  take  my  man  Watson  to  work  up  there  but 
he  got  some  appointment  as  actuary. 

The  Commissioner:  I  would  like  to  ask  what,  if  anything,  there  is  in  the 
notion  that  some  people  have  that  the  wage  is  increased  in  proportion  to  the 
risk  attendant  upon  the  work? 

Mr.  Boyd:     There  is  nothing  in  that  wdiatever. 

Mr.  Bancroft:     Are  you  familiar  with  all  the  systems  in  Europe? 

Mr.  Boyd:     I  have  made  a  careful  study  of  them. 

Mr.  Bancroft:  In  Great  Britain  the  workmen  do  not  contribute  to  work- 
men's compensation. 

Mi;.  Boyd:  Under  the  old  act  they  do  not.  Under  the  new  act  they  do, 
the  Lloyd  George  Act. 

Me.  Bancroft:  That  is  the  Sickness  Act.  It  is  not  Workmen's  Com- 
pensation. 

Mr.  Boyd:  Oh  yes,  it  covers  the  whole  thing.  It  insures  against  sickness, 
accidents,  old  age  and  out  of  work. 

Mr;.  Baxcroft:  Great  Britain  is  in  this  position.  Germany  first  brought 
in  a  bill  for  sickness  and  death  insurance;  secondly  they  brought  in  a  Bill  for 
invalidity  and  old  age,  and  then  they  introduced  workmen's  compensation.  Great 
Britain  started  with  workmen's  compensation  and  they  are  now  supplementing. 

Mr.  Boyd:  Germany  does  not  have  any  compensation  in  the  sense  that 
England  hi 

Mi;.  Bancroft:     They  started  where  England  left  off. 

Mr.    Boyd:     The  German   Act  is  sickness,  accident,  and  old  age  insurance. 
A.c1   is  compensation  and  the  award  is  made  against  the  employer 
personally,  hut   in  Germany  the  award   is  against  the  fund,  not  against  the  em- 
ployer  at  all. 

Mb.    B  'ir:     In   Great  Britain   we  claim   this,  Mr.  Boyd,  that  the  social 

insurance  of  Mr.  Lloyd  George  has  nothing  to  do  with  the  Workmen's  Compensa- 
tion at  present  in  existei  That  legislation  stands  and  is  being  worked  out  in 
some  measure   to  a    satisfactory  conclusion.       Now,  in   Germany  we  also  claim 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  351 

that  directly  the  workmen  do  not  contribute  to  workmen's  compensation,  and  we 
have  evidence  we  think  to  establish  that. 

Mi;.  Botd:     You  are  mistaken  about  that,  because  he  does  contribute. 

Mr.   Bancroft:     I  said  directly. 

Mr.  Boyd:  It  takes  it  out  of  his  pocket  and  puts  it  in  there.  It  does  not 
make  any  difference. 

Mi;.  Haxcroft:  There  is  a  difference,  and  we  want  to  establish  this  thor- 
oughly, that  in  Germany  the  man  who  is  injured  comes  under  the  siekness  insurance 
for  thirteen  weeks.     The  compensation  takes  care  of  him  after  the  thirteen  weeks, 

Mr.  Boyd:  You  are  mistaken  in  calling  it  compensation.  Tt  is  insurance 
after  thirteen  weeks,  because  his  claim  is  against  the  fund,  not  against  the  employer. 

Mr.  Bancroft:  The  fund  in  Germany  is  not  accident  insurance.  We  could 
call  it  workmen's  compensation  and  have  the  same  act. 

Mr.  Boyd  :  When  you  use  the  word  compensation  in  the  British  Act  there 
is  as  much  difference  as  day  and  night,  because  under  the  Compensation  Act  the 
award  is  made  against  the  empiloyer  personally,  and  if  he  is  able  to  pay  it  you  get 
it,  and  if  he  is  not  you  don't  get  it. 

Mr.  Bancroft:  Aren't  these  terms  as  to  which  the  employers  differ,  and 
which  the  workmen  do  not  differ?  Employers'  liability  to  the  employees  is  dif- 
ferent from  collective  insurance,  or  even  a  mutual  trade  insurance  association. 
To  the  workmen  compensation  is  compensation  whatever  you  call  it,  if  he  gets 
compensated  for  his  injury. 

Mr.  Boyd:     He  gets  the  money. 

Mr.  Wegenast:     If  he  gets  it;  there  is  the  problem. 

Mr.  Bancroft:  We  claim  this,  and  I  think  we  can  establish  it.  that  in 
Great  Britain  the  workmen  do  not  contribute,  and  in  Germany  the  workmen  do 
not  contribute  to  workmen's  compensation. 

Mr.  Boyd  :     You  are  mistaken  in  the  way  you  claim  it. 

Mr.  Bancroft:  In  Italy,  in  Holland,  and  in  Sweden  the  legislation  is  not 
built  upon  that  theory.  There  are  only  two  places  in  Europe,  Switzerland  and 
Austria,  and  the  jthird  place  where  there  is  that  kind  of  legislation,  where  the 
workers  contribute,  is  the  State  of  Ohio.     We  claim  the  evidence  is  all  against  it. 

Mr.  Boyd:  Your  statement  about  Germany  is  not  a  correct  statement,  be- 
cause a  man  has  his  leg  cut  off,  and  the  workmen  pay  for  thirteen  weeks  in  the 
insurance.  That  is  bodily  injury  which  we  in  Ohio  treat  simply  as  accident  in- 
surance- 

Mr.  Bancroft:  Supposing  you  wiped  the  social  insurance  out  in  Germany, 
the  sick  and  death  insurance,  and  the  invalidity  and  old  age  insurance,  and  left  just 
what  they  call  the  accident  insurance,  would  the  workmen  contribute? 

Mr.  Boyd:  No,  but  what  would  he  get?  He  would  lose  $550,000,000  in 
twenty  years  and  get  $232,000,000. 

Mr.  Bancroft:  It  was  because  that  legislation  was  in  existence  first  that 
they  had  to  make  it  in  that  way.  In  Great  Britain  they  do  not  have  any  dif- 
ficulties. 

Mr.  Boyd  :  It  does  not  make  any  difference  how  it  was  brought  about  so  long 
as  he  contributes. 

Mr.  Bancroft  :  I  am  saying  directly  the  workmen  do  not  contribute  in 
Germany,  Great  Britain,  Holland  and  Italy.  There  are  only  the  two  places, 
Switzerland  and  Austria. 

Mr.  Boyd  :  Your  statement  is  not  a  correct  one.  You  may  say  it  isn't 
direct  and  I  may  say  it  is  direct,  but  that  does  not  prove  anything.     It  is  a  mere 


352 


MINUTES  OF  EVIDENCE:  No.  65 


ier  one  recognizes  a  fact  to  lie  so.     If  everything  is  treated  as  sick 

insurance  then  he  contributes.     A  man  loses  his  leg.,  or  both  arms,  or  his  eye,  or 

his  nose,  and  the  workmen  are  assessed  two-thirds  the  cost  of  carrying  him  thirteen 

Now,  if  we  treat  everything  of  that  kind  after  seven  days,  why,  that  is 

accident  insurance,  although  it  is  paid  under  the  sick  law. 

Me.  Bancroft:  That  is  right.  In  Ontario  at  the  present  time  that  is 
why  Ave  say  the  workman  is  not  assessable.  We  are  not  dealing  with  social 
insurance.     We   are   dealing  with   accident   insurance. 

Mr.  Boyd:  It  is  purely  a  question  of  whether  there  is  anything  in  the 
argument  that  the  workmen  would  be  more  careful  if  he  had  an  interest  in  the 
fund,  and  whether  he  ought  to  contribute  anything  to  the  fund  at  all  or  not. 
That  is  all  there  is  about  it. 

Mr.    Wegenast:     And   the   question    of    the   form   his   contribution   if   any, 

should  take- 

The  Commissioner  :  I  suppose  the  simplest  way  to  test  it  would  be  to  take 
the  German  case.  Supposing  the  man  has  in  his  pocket  $20  to-day.  The  tax 
man  comes  around  and  says  I  want  $10  of  that  for  your  sick  insurance,  and  he 
pays  it  out.  He  meets  with  an  accident  and  he  does  not  get  any  pay  for  the 
thirteen  weeks  for  which  he  has  paid  that  $10.  Surely  it  is  obvious  that  he  is 
contributing  to  his  support  while  he  is  incapacitated  by  the  accident.  Surely 
that  is  manifest. 

Mr.  Bancroft:  But  the  fund  that  contributes  to  the  thirteen  weeks  is 
not  accident  insurance. 

The  Commissioner:  What  is  the  difference?  It  makes  a  difference  of  $10 
to  him. 

Mr.  Boyd:  Take  the  average  injury  from  a  day  to  three  days  or  five  days, 
and  so  on.  There  are  a  great  many  people  who  do  not  get  out  of  the  hospital 
for  thirteen  weeks  you  see,  so  they  draw  the  line  there  to  include  all  this  hospital 
business  under  the  sick  insurance. 

Mr.  Bancroft  :  If  the  theory  is  advanced  that  the  workman  should  contribute 
just  because  he  is  going  to  be  taken  care  of  as  a  matter  of  sicloiess,  then  why 
is  the  proposition  not  made — 

Mr-  Boyd:  That  has  not  anything  to  do  with  the  question  whether  he 
should  contribute  or  should  not  contribute.  It  is  purely  upon  the  question  whether 
he  ought  to  contribute  anything  or  not.  As  a  matter  of  statesmanship  the  argu- 
ment is  it  would  make  him  more  careful  because  he  is  interested  in  the  fund,  and 
in  Ohio  we  gave  him  more  compensation  in  order  to  get  him  to  do  it,  namely  $12  a 
week  as  long  as  he  lives. 

Mit.  Bancroft:  In  the  first  instance  if  the  workmen  did  not  contribute  they 
only  got  compensation  for  three  hundred  weeks. 

Mi'.  Boyd:     The  workmen  consented  to  that, 

AIi:.  Bancroft:     And  did  the  employers  agree  to  that? 

Mr.  Boyd:  The  employers  wanted  him  to  contribute  25  per  cent,  and  the 
legislature  reduced  it  to  10  per  cent. 

MR.   B  it:     And  when  he  did  it  he  gets  it  to  the  end  of  his  days? 

Mi.-.    Boyd:    Yes- 

Mr.  W  I     there  anything  to  increase  the  contributions? 

rything  is  in   suspense.     There  has  been  no  agitation  one 
way  or  1hr  other. 

Mi:.  Bancroft:  Our  friends  the  manufacturers  claim  in  the  last  analysis 
th<  of  compensation  rests   upon  the  consumer. 


1912  WOKKMEN'S  COMPENSATION   COMMISSION.  353 

Mr.    Boyd:     I  think  there  is  no  question  that  is  true. 

Me.  Bancroft:  Don't  you  think  it  is  a  curious  thing  when  ii  is  an  estab- 
lished fad  that  a  workman  is  entitled  to  compensation  that  lie  lias  to  pay  more 
for  his  provisions  and  also  they  take  it    from  his  wages? 

Mr.  Boyd:  If  you  think  that  simply  stand  on  it.  The  question  is  whether 
there  is  anything  in  the  argument  that  the  workmen  are  more  careful  if  they 
are  interested  in  the  fund.  Now.  there  was  a  compromise  in  order  to  get  some- 
where, so  that  all  workmen  in  Ohio  where  there  were  five  persons  and  more 
employed  would  be  under  the  protection  of  the  law  and  have  the  advantage. 
I  wouldn't  take  the  responsibility  of  standing  out.  I  thought  if  I  could  get 
total  disability  as  long  as  it  lasts  I  would  get  the  report  before  the  legislature/, 
and  let  the  workmen's  contribution  be  25  per  cent.,  and  let  the  legislature  ham- 
mer it   down. 

Mr.  Bruce:  If  it  is  true  that  in  the  last  analysis  the  consumer  has  got  to 
bear  the  expense  that  is  a  double  penalty. 

Mr.  Boyd:     That  woujd  be  so  if  the  workmen  paid  it  all. 

Mr.  Bancroft:     We  claim  there  is  sacrifice  at  both  ends. 

The  Commissioner  :     You  surely  shut  your  eyes  to  the  fact  that  every  manu- 
facturer also  pays.     You  must  be  fair  in  these  things.     Every  manufacturer  as 
a  consumer  pays  as  well  as  paying  his  tax- 
Mi;.  Bancroft:     He  is  one  in  about  5,000.     Suppose  he  has  5,000  workmen 
and  he  is  only  one. 

The  Commissioner:  Each  pays  in  proportion  to  the  amount  that  he  con- 
sumes. 

Mr.  Simpson:  But  the  mass  of  consumers  who  arc  going  to  benefit  by  the 
compensation  system  also  pay  the  increased  cost  of  production. 

The  Commissioner  :     So  does  the  manufacturer. 

Mr.  Simpson:  But  he  is  only  one  in  five  or  ten  thousand,  and  he  reaps 
the  chief  benefit  from  it,  and  he  does  not  bear  any  burden  at  all.  It  looks  as  if 
it  is  anything  so  long  as  you  do  not  hit  the  profit  end  of  the  employers'  business. 

Mr.  Bancroft  :  As  far  as  we  are  concerned  the  whole  sentiment  is  against 
contribution  by  the  workmen.  They  think  it  is  an  injustice  to  the  workers  from 
that  standpoint.  It  is  admitted  as  a  theory  of  workmen's  compensation  all  over  the 
would  that  it  is  a  natural  charge  on  industry  to  take  the  hazard  and  the  risk 
and  pay  for  it,  and  to  take  the  wages  of  the  workmen  at  this  stage  of  the  game 
for  the  purpose  of  paying  the  compensation  seems  a  rank  injustice-  There  is 
no  doubt  in  Great  Britain  they  do  not  contribute,  and  in  Germany  they  do  not 
contribute  directly,  and  they  do  not  in  any  other  country  directly.  It  is  only 
by  reason  of  the  fact  that  they  have  social  insurance  mixed  up  that  it  can  be 
claimed   they  do  contribute. 

Mr.  Wegenast  :  Mr.  Watts  of  the  Canadian  General  Electric  Company  is 
here  and  would  like  to  make  a  statement. 

Mr.  G.  W.  Watts:  Beferring  to  the  hearing  before  the  Commissioner  on 
Workmen's  Compensation,  it  being  assumed  that  compensation  for  all  injuries 
is  to  be  paid  without  regard  to  the  negligence  of  the  workman,  it  necessarily 
follows  that  the  cost  of  this  will  be  very  heavy  as  compared  with  the  present  law, 
and  this  extra  cost  will  be  added  to  the  cost  of  the  products  in  this  Province 

I  understand  that  the  view  has  been  repeatedly  urged  before  the  Commissioner 
that  very  few  accidents  are  due  to  the  fauilt  of  the  workman.     This  is  not  correct 
as  the  statistics  which  have  been  gathered  on  this  subject  by  the  Commission  sent 
to  Europe  'last  year  from  the  United  States  point  out- 
23  l. 


354  MINUTES  OF  EVIDENCE:  No.  65 


A  proportion  of  the  accidents  are  seemingly  unavoidable  and  this  percentage 
will  vary  with  the  various  occupations,  some  being  more  risky  than  others. 

A  proportion  is  due  to  the  fault  of  the  employer  or  his  agent,  and  a  consider- 
able proportion  is  due  to  the  negligence  and  carelessness  of  the  workman  who 
receives  the  injury,  and  his  fellow-workman. 

My  experience  of  the  matter  is  that  the  larger  percentage  of  accidents  which 
occur  are  due  to  the  neglect  of  either  the  workman  injured  or  his  fellow-workman. 

As  to  the  question  of  contribution  on  the  part  of  the  workman  to  the  expense, 
I  think  it  is  nothing  but  fair  and  right  that  he  should  contribute  a  proportion 
of  this  expense  if  he  is  to  receive  compensation  for  all  injuries,  and  the  question 
of  his  own  contributory  negligence  or  that  of  a  fellow-workman,  is  to  be  eliminated 
when  awarding  this  compensation. 

The  contribution  by  the  workman  of  any  portion  of  the  expense  will  tend  to 
make  all  such  contributors  vigilant  in  preventing  accidents  as  they  will  feel  that 
their  own  money  is  at  stake  and  it  is  desirable  to  have  the  co-operation  of  the 
workman  in  this. 

I  am  of  the  opinion  that  the  question  of  concurrent'  insurance  should 
have  no  bearing  upon  the  payment  of  compensation  as  it  should  be  rated  exactly 
the  same  as  life  insurance,  and  if  a  man  is  willing  to  pay  the  additional  expense 
of  further  insurance  beyond  the  amount  which  is  paid  for  by  him  in  his  contribu- 
tion to  the  workmen's  compensation,  he  should  be  entitled  to  receive  that  con- 
current insurance. 

I  am  in  favour  of  a  collective  liability  system  rather  than  an  individual  one. 
The  individual  system  is  burdensome  and  cannot  attain  the  maximum  results 
for  the  workman  or  his  family,  as  payment  of  the  compensation  is  contingent  upon 
the  financial  strength  and  solvency  of  the  individual. 

Two  men,  we  will  say,  may  be  injured  in  an  identical  manner  in  the  employ 
of  two  different  firms,  and  both  may  be  entitled  to  an  identical  amount  of  com- 
pensation. However,  it  is  possible  that  one  firm  might  be  in  such  a  financial  con- 
dition that  it  could  not  pay  compensation  while  the  other  firm  might  be  perfectly 
able  to  pay  theirs.  The  result  of  this  would  be  that  although  both  workmen 
could  be  equally  injured  and  both  equally  entitled  to  receive  compensation,  one 
would  receive  compensation,  and  the  other  would  not.  It  may  be  urged  that 
this  can  be  overcome  by  forced  liability  insurance  but  even  this  would  not  assure 
the  compensation  reaching  the  workman  or  his  family  in  all  cases,  as  it  would 
be  contingent  upon  there  being  no  lapse  on  the  part  of  the  employer  in  keeping 
the  insurance  up,  and  also  upon  the  continued  solvency  of  the  insurance  company 
carrying  the  policy,  whereas,  with  a  collective  liability  properly  and  economically 
administered,  all  injured  would  be  assured  of  their  compensation  and  the  maxi- 
u m  proportion  of  the  money  raised  would  be  free  for  use  in  payment  of  com- 
pensation. 

present  method   is  very   wasteful   as   a   large   proportion   of   the   money 
which  is  devoted  to  compensation  is  wasted  in  litigation  and  only  a  comparatively 
entage  of  the  total  can  find  its  way  into  the  hands  of  the  injured  work- 
man ot  his  family. 

Mfe.  W  i  :     You  are  manager  of  the  Canadian  General  Electric  Com- 

pany,  I  belie1 

Mr.  Watts:     I  am  manager  of  the  works. 

Mi:.  Wegenast:     Eave  you  any   books  showing  the  proportion  of  accidents 
due  to  the  EauH  of  the  workman,  the  faull  of  the  employer,  and  so  on? 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  355 

— — i 

Me.  Watts:  I  took  out  some  figures  in  our  own  establishment  for  a  period 
of  a  year. 

Mr.  Wegenast:     Have  you  the  figures  with  you? 

Mr.  Watts:     I  have  the  way  it  worked  out,  the  percentage. 

Mr.  Wegenast:     How  many  accidents  docs  that  cover? 

Mr.  Watts  :     Probably  three  hundred  of  all  kinds. 

Mr.  Wegenast:     How  did  the  proportion  run? 

Mr.  Watts:  About  forty  per  cent-  represents  the  hazard  of  the  industry, 
and  probably  about  fifty-six  per  cent,  due  to  the  negligence  either  of  the  fellow- 
workman  or  the  worker  himself,  and  the  balance  is  due  to  the  neglect  of  the  com- 
pany. 

The  Commissioner:     That  is  a  very  small  balance. 

Mr.  Watts:  On  the  figures  here  it  works  out  one  per  cent,  but  I  am 
allowing  the  figures  for  cases  that  were  afterwards  adjudged  against  us. 

The  Commissioner:  Do  you  think  if  we  got  a  similar  report  from  the 
workmen  the  percentages  would  be  anything  like  the  same? 

Mr.  Watts:  I  think  you  would  probably  find  if  the  "workmen  who  were 
mixed  up  in  the  accident  itself  were  reporting  they  would  report  it  very  much 
the  same,  but  if  some  one  else  was  passing  on  it  they  wouldn't.  This  is  based 
upon  the  report  as  made  by  our  own  men  and  it  is  truthful  as  far  as  we  know, 
but  of  course  it  might  not  be  absolutely  correct  in  all  cases-  However,  the  proof 
of  that  is  in  the  faot  that  in  the  great  majority  of  these  cases  very  few  ever  went 
so  far  as  claims  being  made,  and  of  those  claims  which  were  made  there  were 
comparatively  few  where  decisions  were  given  against  us. 

The  Commissioner  :     Do  you  mean  actions  ? 

Mr.  Watts:     Or  demands  made  for  compensation  at  all? 

Mr.  Wegenast  :     They  did  not  even  go  so  far  as  to  ask  for  compensation. 

Mr.  Watts:     No. 

Mr.  Wegenast:  Do  you  pay  doctors'  bills  in  cases  where  they  are  not  de- 
serving ? 

Mr.  Watt:  Well,  in  two  of  our  works  we  don't  pay  doctors'  bills.  The 
men  themselves  have  a  mutual  benefit  association  and  that  takes  care  of  the  doctors' 
bills,  and  also  gives  them  a  small  sum  of  money,  $3  or  $4  a  week. 

Mr.  Wegenast:     Do  you  contribute  to  that? 

Mr.  Watts:  We  don't  now.  We  did  when  it  was  first  started.  It  is  self- 
supporting  now- 

Mr.  Bruce:  You  heard  Mr.  Boyd's  figures  this  morning.  How  do  you 
account  for  the  large  difference  between  his  figures  and  the  figures  you  have  sub- 
mitted, as  regards  the  risk  in  the  business?  He  said  10  per  cent,  of  accidents 
were  unavoidable,  due  to  an  "act  of  God,"  and  he  said  44  per  cent,  of  the  accidents 
were  due  to  the  hazard  of  the  business,  after  four  years  of  investigation.  He  said 
18  per  cent,  were  due  to  negligence  on  the  part  of  the  employer,  and  28  per  cent, 
on  the  part  of  the  employee;  and  you  shoulder  all  the  responsibility  over  the  40 
per  cent,  on  to  the  employees. 

Mr.  Watts:  Not  entirely-  My  figures  are  not  his.  They  were  gathered 
from  a  different  source  entirely,  and  under  different  conditions.  This  is  my 
own  personal  experience. 

Mr.  Bruce:     I  am  asking  the  reason  for  the  vast  difference. 

Mr.  Watts:     I  don't  know  why.     You  can  ask  Mr.  Boyd  yourself. 

The  Commissioner:  Mr.  Boyd  was  speaking  of  the  whole  matter,  and  Mr- 
Watts  is  only  telling  the  experience  in  his  particular  establishment. 


356  MINUTES  OF  EVIDENCE:  No.  65 


Me.  Wegenast:  Now,  what  increase  in  expenditure  will  this  mean  to  your 
concern,  if  all  cases  are  to  be  compensated? 

Mr.  Watts:  That  would  be  pretty  hard  to  fix,  but  I  think  it  would  be  at 
least  three  times  as  much  as  it  is  now;  perhaps  more. 

Mr.  Wegenast  :  I  do  not  know  whether  it  is  fair  to  ask  you  what  that  would 
mean  to  the  individual   firm  with   which  you   are  connected. 

Mr.  Watts:     It  might  mean  $40,000. 

Mr.   Wegenast:     Additional   annual  expense  to   you? 

Mr.   Watts:     Yes,  depending  entirely  on  the  amount. 

Mr.  Wegenast:.  You  are  speaking  for  the  institution  you  represent?  You 
are  willing  then  to  go  into  a  scheme  of  tbis  kind? 

Mr.  Watts  :  No,  I  am  not  autborized  to  say  I  am  willing  to  do  anything 
for  my  company.     I  am  giving  information. 

Mr.  Wegenast:  Perhaps  that  was  a  strong  way  of  putting  it,  but  you  have 
expressed  yourself  as  favouring  a  collective  liability  system  of  compensation  for 
workmen  as  against  an  individual  liability  system. 

Mr.   Watts:     Undoubtedly. 

Mr.  Wegenast:  Would  it  make  any  difference  to  your  concern  which  of 
those  schemes  was  adopted,  and  what  difference  would  it  make? 

Mr-  Watts:  It  would  make  a  very  considerable  difference,  but  I  couldn't 
put   it  in  money  value  at  the  moment-     It  would  be  very  heavy. 

Mr.  Wegenast  :  An  adverse  difference  if  an  individual  system  was  adopted 
instead  of  an  insurance  system   of  some  kind? 

Mr.  Watts:     Undoubtedly.    ' 

Mr.  Wegenast  :  Tbat  is  speaking  entirely  irrespective  of  the  contribution 
by  the  workmen? 

Mr.   Watts  :     Yes. 

Mr.  Gibbons  :     Your  place  must  be  unduly  hazardous. 

Mr.   Watt:     Not  necessarily.     There  are  lots  of  accidents  not  reported. 

Mr.  Gibbons:  Then  being  a  hazardous  occupation  I  suppose  you  put  up 
notices  that  a  man  is  not  to  do  so  and  so.  and  if  be  does  so  it  is  considered  that 
be  has  been  negligent? 

Mi;.  Watt:     No,  we  do  not  lay  traps  for  people,  Mr.  Gibbons.   . 

Mr.  Gibbons:  Well,  just  along  tbat  line  we  were  told  the  other  night  that 
there  was  a  clause  in  your  rules  that  gross  negligence  was  to  be  penalized.  That 
looks  very  innocent,  but  I  see  now  that  it  looks  very  much  like  a  trap.  Then  fur- 
ther down  the  line,  if  we  come  to  section  7,  it  says  the  workmen  should  pay  con- 
trib  according  to  the  number  of  accidents  caused  through  their  negligence, 

you  come  along  now  and  say  that  is  59  per  cent.,  and   therefore  you  would 

cl   the  workingman  to  pay  59  per  cent. 

MR.  Watts:     Did   I  say  that? 

Mi;.  Gibbons:     Well,  41  per  cent. 

The  Commissioner:  He  is  not  responsible  at  all  for  Mr.  Wegenast's  state- 
ment. 

MR.  Watts:     I  did  qoI   make  those  statements.  Mr.  Gibbons. 

An  expert   on  accident   insurance  was  here  the  other  night, 

aid    I   think  in  places  where  men  wwr  injured,  where  there  was  only  the 

common   law  of  the  employers'  liability  to  claim   under,  that  claims  made  were 

only  in  aboul    10  per  cent,  of  the  number  of  total  accidents  that  happened?     Then 

where    there    \\.\.<   compensation    the   claims    went  up   as   high    as    60    per   cent. 

;"  I"'1'  pent.,  as  it  has  been  in  England.       Do  yon  not  think  the  reason  whv 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  357 


there  are  so  many  who  do  not  claim  compensation  for  their  injuries  in  a  con- 
cern as  big  as  yours  is  because  they  know  they  haven't  the  money  to  fight  and 
they  are  in  the  hands  of  the  lawyers  and  they  lei   the  thing  go? 

Mr.  Watts:  That  has  not  been  my  experience.  I  have  never  found  any- 
body loathe  to  attack  our  company.     It  has  been  the  other  way. 

Mi;.  Wegenast:  Was  it  in  your  company  where  the  man  went  to  sleep 
on  the  belt? 

Mr.  Watts:  No,  that  was  an  accident  that  occurred  in  another  place.  A 
man  went  to  sleep  on  a  belt  that  was  still,  and  he  was  killed  when  the  machine 
started  up. 

The  Commissioner:     Was  he  sober? 

Mr.  Watts  :  Yes,  but  he  was  working  at  night  and  the  machines  were  not 
running  and  he  lay  down  on  this  belt  and  went  to  sleep,  and  the  man  who  was 
supposed  to  have  seen  that  everything  was  right,  didn't  see  him,  and  the  machine 
was  started  up  and  the  man  was  carried  under  the  pulley  by  the  belt. 

Mr.  Bancroft  :  I  think  there  was  a  case  your  Lordship  will  remember  where 
a  man  was  under  instructions  by  a  foreman,  and  knowing  that  a  certain  generator 
was  not  fastened  to  the  floor  securely  enough  he  grabbed  a  wrench  and  went  to 
make  it  firmer,  although  he  had  not  been  instructed,  and  he  put  his  knee  on  the 
belt  and  was  killed. 

The  Commissioner:     I  do  not  remember  that  case. 

Mr.  Bancroft:  Of  course  they  got  damages,  although  they  brought  in 
their  negligence  claim,  that  he  was  not  instructed,  but  the  man  seeing  the  machine 
was  not  fastened  went  to  do  his  duty  without  asking  his  foreman,  and  because 
he  did  that  they  called  it  contributory  negligence. 

The  Commissioner:  It  would  be  his  volunteering  to  do  something.  There 
was  a  case  the  other  day  against  I  think  the  General  Electric  Company,  where 
Chief  Justice  Mulock  dismissed  the  case.  The  man  was  doing  the  very  best  thing 
and  doing  it  honestly  for  the  company,  hut  he  was  not  sent  to  do  that  work.  He 
volunteered  to  do  it. 

Mr.  Watts  :  Another  workman  started  the  machine  without  seeing  whether 
the  man  was  free  of  the  machine,  and  the  man  was  killed,  and  the  verdict  was 
given  in  our  favour. 

The  Commissioner  :     I  think  it  was  tried  without  a  jury. 

Mr.  Simpson  :  Taking  it  for  granted,  Mr.  Watts,  that  the  number  of  accidents 
which  you  have  enumerated  are  directly  traceable  to  negligence  on  the  part  of  the 
workmen,  would  you  say  in  your  industry  that  an  act  of  carelessness,  no  matter 
from  what  source  or  how  trivial  it  might  be,  would  cover  the  whole  risk,  if  it  arises 
out  of  the  nature  of  your  industry,  as  compared  with  tit  her  industries? 

Mr.  AVatts  :  I  don't  know  just  what  your  question  means,  but  if  you  want  to 
ask  whether  our  works  or  our  industry  is  any  more  hazardous  than  industries  of  a 
similar  nature  I  would  say  no, 

Mr.  Simpson  :  Would  you  say  your  industries  were  no  more  hazardous  than 
others,  such  as  boots  and  shoes? 

Mr.  Watts  :  No.  if  it  is  running  machines  I  don't  think  it  is  anv  more 
hazardous. 

Mr.  Simpson:     In  your  foundry  do  they  not  carry  big  pieces  of  steel? 

Mr.  Watts:  When  you  say  our  industry,  there  is  not  an  equal  risk  in  the 
whole  of  it. 

Mr.  Simpson:     I  am  referring  to  the  Dominion  Bridge  Companv. 


358 


MINUTES  OF  EVIDENCE:  No.  65 


Me.  Watts  :  In  the  handling  of  those  heavy  masses  there  is  naturally  greater 
risk  than  the  handling  of  light  bodies. 

Mr.  Simpson:     An  act  of  carelessness,  whether  it  is  big  or  small? 

Me.  Watts  :  A  very  serious  act  of  carelessness  might  result  in  nothing  and  a 
very  trivial  act  of  carelessness  might  result  in  considerable  damage.  It  just 
depends. 

Mr.  Wegenast:  As  a  business  man  is  there  anything  startling,  or  is  there 
anything  to  alarm  you  or  frighten  you,  to  use  the  language  that  has  been  used,  in 
a  system  of  state  insurance  administered  by  the  Province? 

Me.  Watts  :     Not  from  my  point  of  view. 

The  Commissioner:  When  you  stated  you  preferred  collective  to  individual 
liability,  was  that  on  the  basis  of  the  present  Employers'  Liability  Act,  or  the 
proposed  one? 

Mr.  Watts:     Both.     Of  course  my  experience  has  all  been  with  the  present, 

The  Commissioner:  Would  you  prefer  to  come  under  the  collective  system 
with  increased  liability,  or  stay  where  you  are? 

Mr.  Watts  :  Well,  I  don't  know.  I  have  not  followed  that  up.  I  am  going 
on" the  assumption  that  the  Government  is  going  to  do  something,  and  I  am  stating 
my  views  on  that  assumption. 

Mr.  Wegenast:  What  about  this  feature:  The  question  of  assessment  on 
capitalization,  or  the  current  cost  plan?     Would  that  make  any  difference  to  you? 

Mr.  Watts:     It  would  make  a  very  great  difference. 

Mr.  Wegenast  :  Would  it  make  any  difference  to  your  willingness  to  see  an 
act  introduced? 

Mr.  Watts  :     I  would  sooner  see  it  on  the  current  cost  basis. 

Mr.  Wegenast  :  How  do  you  think  the  proposition  would  be  received  by  the 
general  public? 

The  Commissioner  :  I  do  not  think  I  am  concerned  in  that.  That  is  for 
the  Government.  I  am  not  going  to  be  governed  by  the  political  aspect,  using  it 
in  the  broad  sense. 

Mr.  Wegenast  :     I  do  not  want  to  press  the  matter  at  all. 

The  Commissioner:  I  am  going  to  recommend,  when  I  come  to  make  a 
recommendation,  what  I  think  is  right,  and  as  far  as  I  think  it  is  feasible.  I  will 
not  recommend  anything  that  I  think  public  opinion  would  not  justify,  and  I  would 
not  very  likely  recommend  anything  that  I  thought  the  House  would  not  adopt. 
1  think  it  would  be  a  great  mistake  to  have  what  is  admittedly  a  serious  grievance 
of  the  workingmen,  to  have  a  remedy  delayed  by  proposing  something  that  would 
not  Ito  !,  and  have  the  thing  thrown  over  perhaps  for  years. 

AIi;.  Wegenast:     Perhaps  I  did  not  go  at  it  in  the  proper  way. 

The  Commissioner:    I  do  not  think  I  sbould  take  evidence  of  that  kind. 
Mi:.    Rancroft:     If   a   person    is   injured   in    a   big   industry,   poorly   off  as 
wage-workers  are,  the  only  way  they  can  make  a  claim  against  the 
company  of  any  kind  is  by  consulting  a  lawyer. 

Thai  is  absolutely  not  the  case.     We  would  very  much  rather 
v  would  ool  go  near  ;i  lawyer.     Tbey  will  get  more  money  out  of  us  by  not  going. 
Mi:.   Bani  ROPT:      Is  that  not  generally  the  case,  they  have  to  make  a  bargain 
with  the  lawyer. 

Mi:.  Watts:     I  don't  know  aboui  other  people  hut  in  our  company  we  do  not 
wanl   them  in  consull   ;i  lawyer.     They  can  tret  better  sdtlpments  without  it. 
Mi:.  Bancroft:     Have  you  n  list  of  accidents  and  the  amounts  of  compensation 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  359 

paid?     I  would  like  to  get  at  how  many  claims  are  made,  and  if  they  do  not  claim 
why  they  do  not  claim. 

Mr.  Watts:  I  may  tell  you,  Mr.  Bancroft,  that  my  statement  is  compiled  on 
every  accident  without  regard  to  whether  it  is  an  accident  that  you  could  claim  on 
or  not.  J  have  in  view  the  fact  that  under  tins  so-called  compensation  act,  with 
all  the  defences  swept  away,  that  a  man  has  got  to  be  paid  anyway,  without  regard 
to  his  negligence,  and  that  a  great  many  accidents  that  are  reported  by  us  to-day 
for  our  self -protection  would  then  come  in,  which  would  not  be  considered  accidents 
under  the  present  act  and  where  there  is  no  compensation  payable.  I  am  taking 
into  account  the  fact  that  they  would  probably  come  in  under  a  new  law. 

Mil.  Bancroft:  From  a  business  standpoint  collective  liability  or  a  tax  paid 
into  stale  insurance,  with  contributory  negligence  swept  aside,  without  any  chance 
of  litigation,  would  be  a  better  proposition  to  you  than  what  you  are  doing  at  the 
preseut  time. 

Mr.  Watts  :  No,  it  will  cost  us  more  money,  but  we  would  have  no  rows  or 
trouble  or  fighting  with  people,  and  no  arguments,  and  we  would  know  exactly 
where  we  were  at. 

Mr.  Bruce:  As  has  been  shown,  it  might  only  be  in  initial  instances  that 
it  would  be  heavier-  If  it  was  an  assessment  plan  according  to  the  risk  of  the 
industry,  and  all  assessments  were  based  upon  the  number  of  accidents,  then  it 
would  probably  come  less  to  your  industry. 

Mi;.  Watts:  No.  it  would  be  more  even  on  that  basis.  Of  course  it  would 
come  very  much  heavier  if  it  was  capitalized  on  the  start,  but  it  will  be  heavier. 
You  must  recognize  the  fact  when  you  start  in  to  pay  compensation  for  all  injuries 
without  regard  to  whether  a  man  is  at  fault  or  not  it  will  be  very  much  heavier. 
You  have  got  the  percentage,  whether  my  figures  are  right,  or  somebody  else's  are 
right,, , 

Mr.  Sangster  :  Would  the  extra  expense  which  would  be  raised  in  connection 
with  the  new  law  be  devoted  to  payment? 

Mr.  Watts  :     I  do  not  quite  follow  your  question. 

Mr.  Sangster:  I  mean  the  extra  expense  in  connection  with  the  new  law, 
would  that  be  devoted  to  the  claims  or  to  legal  procedure? 

Mr.  Watts  :  Oh,  no ;  as  I  understand  it  this  present  act  if  put  into  force 
would  assess  a  certain  rate  upon  the  wage  roll,  and  that  goes  into  a  fund  which  is 
administered  by  some  department  of  the  Government,  and  I  have  no  doubt  they  will 
administer  it  honestly  and  then  there  is  no  law  about  it  at  all.  A  man  has  only 
got  to  come  and  prove  his  case  to  the  satisfaction  of  whatever  Board  is  appointed. 
The  employer  is  out  of  it  entirely.  It  wipes  out  all  our  law  costs  and  the  law  costs 
of  the  individual  who  is  suing  us,  and  the  liability  company,  or  whoever  it  may  be. 

Mr.  Simpson  :  Whatever  yon  pay  for  the  claims  for  these  accidents  it  must 
come  out  of  your  profits,  out  of  your  revenue? 

Mr.  Watts:     Of  course. 

Mr.  Simpson:  If  you  were  to  pay  into  a  fund,  which  might  be  even  more 
than  you  are  paying  now,  and  then  you  tacked  that  on  to  the  cost  of  the  product 
you  would  be  in  a  far  better  position  under  the  new  act  than  at  the  present  time. 

Mr.  Watts:  If  we  got  it  out  of  our  customers,  yes.  if  we  got  the  increased 
cost. 

Mr.  Simpson:  That  is  what  I  wanted  to  emphasize  in  regard  to  the  assess- 
ment on  the  consumer. 

Mr.  Watts:  The  consumer  will  pay  in  any  event  in  thee  last  analysis,  or 
would  come  out  of  the  business. 


MINUTES  OF  EVIDENCE:  No.  65 


The  Commissioner:     Unless  you  are  forced  to  live  on  a  smaller  profit. 

Watts  :     If  you  keep  on  paying  more  than  you  are  earning  you  have  got 

to  go  out  of  busin 

The  Commissioner:     If  you  are  making  25  per  cent,  on  your  capital  then 

you  cuii id  stand  a  little  shave. 

Mr.  Simpson:     I  want  to  give  you  a  little  illustration  if  you  will  permit  it. 

us  suppose  for  a  moment  that  the  National  Trust  was  a  hazardous  corporation. 

I  read  their  statement  very  carefully  in  the  paper  the  day  before  yesterday,  and  I 

saw  that  they  paid  ten  per  cent,  upon  the  invested  capital,  and  they  put  away 

0,000  as  a  reserve  fund,  and  another  $100,000  for  another  fund.     Now,  I  claim 

"manufacturing  establishment  that  can  show  such  good  returns  as  that  should  be 

assessed  a  little  on  the  profits  and  not  put  it  entirely  on  the  cost  of  production  so 

that  the  consumer  will  have  to  pay  it  all. 

The  Commissioner:     Competition. 

I  judge  from  what  you  said,  Mr.  Watts,  that  you  have  no  insurance  system 
established  by  your  company? 

Mr.  Watts:     No,  there  is  a  mutual  benefit  society,  but  that  is  not  ours. 
There  is  no  system  of  insurance  in  the  work  itself. 

Air;.  Wegenast:  I  have  two  or  three  members  of  the  Committee  who  have 
been  associated  with  me  in  the  work,  who  would  like  to  say  something  simply  by 
way  of  support  from  a  practical  business  standpoint.  On  Tuesday  night  I  hope  to 
have  Mr.  Dawson,  the  expert  actuary  from  New  York.  He  was  a  joint  author,  with 
Mi'.  Frankel,  of  the  well-known  work  on  Workmen's  Compensation.  I  thought  to 
have  Mr.  Preston,  the  draftsman  of  the  Washington  Act,  but  he  sent  me  word 
the  day  before  yesterday  that  he  could  not  start  from  Seattle  until  the  7th  Feb- 
ruary, and  I  have  wired  him  that  I  did  not  know  whether  the  sittings  would 
continue  as  long  as  that,  but  I  would  let  him  know  shortly  whether  there  would 
be  an  opportunity  for  him  to  be  heard.  Mr.  Preston  is  a  man  that  I  think  would 
give  considerable  assistance.  He  is  a  man  of  few  words  as  you  can  see  by  the 
Washington  Ait,  and  yet  it  is  probably  one  of  the  most  compact  pieces  of  legisla- 
tion that  we  have  upon  the  subject. 

The  Commissioner:     Requests  are  coming  in  for  sittings  at  outside  places, 

!  T  suppose  T  will  have  to  comply  with  them.     There  have  been  requests  from 

Hamilton  and  Windsor.     The  east  has  not  spoken  yet,  but  I  suppose  we  will  have 

sn  somewhere  there.     Then  Mr.  MacMurchy,  I  understand,  wishes  to  be  heard, 

Mr.  Merrick  of  the   Employers'  Association,  and  T  think  Mr.  Gander,  repre- 

•  the  Builders'  Exchange,  also. 
Supposing  the  legislature  chose  to  adopt  some  such  scheme  as  the  Ohio  one, 
with    or   without    the    contribution   by   workmen,   and   extending   it   to   all 
workmen  or  employees,  no  matter  how  many  were  employed,  and  if  the  body  of 

ically  required  to  guarantee  to  the  State  the  payment  of 
tributions  by  all  of  them,  or  to  make  it  up  themselves,  what  objection,  if 
aid  there  be  to  that  by  the  employers  of  labor? 
Wi;.  \\  egen  wr:     Well,  so  far  as  T  can  see  T  do  not  think  there  would  be  any 

itever  on  the  part  of  the  employers  with  whom  I  am  concerned. 
TH]  [ONER:     T  do  not  see  how  you  can  escape  from  having  it  in  the 

lebody  he  industry,  or  whoever  is  to  pay  the  burden,  for  any 

deficiency  (hat  may  occur. 

Mi:.  Wi  i  :     Thai  is  exactly  what  we  propose. 

Tin-  COMMISSIONER:     Thai    musl   he  dm,,,  to  make  it  self-sustaining  or  else 
yon  throw  the  burden  on  the  State. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  361 

Mr.  Wegenast:  1  have  gone  so  far  as  to  draw  up  lists  of  the  different  classes 
of  industries.  I  have  a  lisl  before  me  of  all  the  furniture  manufacturers.  To 
this  would  be  added,  I  suppose,  the  manufacturers  of  musical  instrument.-,  so  as  to 

include  all  wood-working  industries.  Now,  1  think  it  is  a  reasonable  business  pro- 
position that  these  industries  should  be  classified  in  this  way,  and  the  cost  of  the 
compensation,  or  industrial  insurance,  whatever  you  choose  to  call  it.  assessed 
upon  it. 

The  Commissioner:  That  would  throw  upon  the  small  employer  all  the 
burden  of  the  little  ones  who  would  not  pay  up. 

Mr.  Wegenast:  I,  of  course,  assume  there  would  be  facilities  for  compelling 
payment. 

The  Commissioner:  You  can't  get  blood  out  of  a  turnip.  I  have  not  con- 
sidered that  aspect  of  it,  but  I  do  not  see  why  they  should  nol  be  classified  just  as 
they  are  in  the  "Washington  Act. 

Mr.  Wegenast:  Well,  there  is  this  argument  that  I  want  to  refer  to  at  a 
later  stage,  that  if  you  classify  them  according  to  the  industry  you  are  affording 
better  facilities  for  their  getting  together  and  working  out  uniform  regulations 
for  accident  prevention. 

The  Commissioner:     You  get  together  as  a  whole  body  now. 

Mr.  Wegenast:  We  have  attempted  as  a  whole  body  to  discuss  preventive 
devices  for  fifty  or  a  hundred  classes  of  industries. 

The  Commissioner:  There  would  be  no  objection  to  your  dividing  it  as  you 
pleased  for  that  kind  of  thing,  but  for  paying  the  tax  I  do  not  see  why  at  present 
its  rate  should  be  stated.  It  may  be  I  am  not  right,  but  that  is  the  way  it 
strikes  me  at  present. 

Mr.  Wegenast:     You  mean  in  the  act? 

The  Commissioner:  In  the  act,  subject  to  modification  from  time  to  time 
by  such  authority  as  the  act  creates,  to  modify  it  according  as  circumstances  show- 
there  ought  to  be  modification. 

Mr.  Wegenast:  That  would  at  once  involve  a  contest  over  the  question, 
and  we  feel  very  strongly  upon  that  matter,  whether  the  whole  capitalized  cost 
should  be  assessed  as  under  the  Washington  Act,  or  only  sufficient  for  the  assessment. 

The  Commissioner:  I  do  not  see  how  that  is  involved  in  the  proposition. 
if  it  is  simply  an  annual  assessment  to  meet  the  losses  of  the  year. 

Mr.  Wegexast:  I  am  quite  satisfied  with  that,  but  you  could  not  fix  the 
rate  in  the  act.  You  would  have  to  leave  it  to  be  adjusted  according  to  the 
number  of  accidents. 

The  Commissioner:  .You  would  have  all  sorts  of  trouble  if  you  hadn't 
something  to  show  the  relation  between  the  amounts  which  the  different  industries 
would  pay.  You  must  have  something  like  that.  My  idea  was  to  have  something 
more  like  a  mutual  insurance  plan  where  there  would  be  a  fixed  payment,  and  then 
if  anything  more  was  required  an  assessment  made  to  meet  that  based  upon  the 
amount,  or  proportionate  to  the  amount  of  the  original  contribution,  and  if  there 
was  a  surplus  it  would  either  sro  to  a  reserve  or  emer^encv  fund,  or  whatever  vou 
might  call  it. 

Mr.  Wegexast:  There  is  this  further  aspect  to  consider.  Those  rates  in  the 
Washington  Act  are  approved  by  the  actuaries  as  being  somewhere  nearly  right  in 
this  business,  and  if  you  put  the  rate  at  twenty  per  cent.,  as  they  have  found  in 
Germany— start  at  twenty  per.  cent,  of  the  ultimate  rate — there  would  be  at  once 
an  awful  howl  that  this  act  was  absurd,  that  it  wasn't  enough  to  carry  the  risk 
and  you  would  have  to  explain  to  all  the  actuaries  your  reasons  for  adopting  the 


362  MINUTES  OF  EVIDENCE:  No.  65 

other  plan  of  insurance,  whereas,  under  the  plan  of  Mr.  Boyd  of  the  Ohio  com- 
sion  it  is  left  for  the  Insurance'  Board  to  work  out  with  actuarial  expert  advice. 
After  ail  it  is  an  actuarial  matter  and  not  a  matter  to  be  discussed  in  the  legis- 
lature, or  perhaps  in  a  Commission  of  this  kind.  It  is  a  matter  for  expert 
actuaries.  I  was  particularly  struck  with  that  feature.  I  had  not  followed  it  out 
to  any  extent  before,  but  it  appeals  to  me  very  strongly  speaking  off-hand.  The 
Commission  or  the  Board,  whoever  they  would  be,  would  be  responsible  for  the 
success  of  the  institution,  and  there  would  be  no  doubt  men  selected  who  would 
give  it  the  requisite  attention,  and  men  of  the  requisite  capacity  to  make  it  a 
success,  and  it  could  very  well  be  left  to  them. 

The  Commissioner:  If  I  were  a  manufacturer  I  would  not  want  it  left  quite 
at  large  that  way. 

Mr.  Wegenast  :  I  think,  speaking  off-hand,  we  would  rather  have  it  in  that 
form. 

The  Commissioner  :     If  I  were  Prime  Minister  I  would  not  want  it  that  way. 

Mr.  Wegenast:     It  would  avoid  criticism  to  leave  it  out. 

The  Commissioner:  I  would  not  be  willing  to  leave  it  to  any  Board  that 
was  appointed.     They  would  make  ducks  and  drakes  of  the  whole  scheme. 

Mr.  Wegenast  :  Well,  they  could  do  that  in  any  event.  It  is  the  old  question 
of  tying  down  the  administrative  body.  It  must  have  powers  of  adjustment,  and 
whatever  rates  are  fixed  in  the  act  must  necessarily  be  only  approximations,  and 
they  must  necessarily  be  subject  to  adjustment,  and  for  that  reason  I  should  think 
it  might  be  just  as  well  to  go  further  and  avoid  criticism  by  leaving  the  details  to 
the  actuaries. 

The  Commissioner  :  However.  I  am  only  discussing  this  on  your  argument 
that  insurance  is  the  proper  thing.     Of  course  that  is  not  settled  vet. 


NINTH   SITTING. 


Legislative  Building,  Toronto. 

Friday,  19th  January,  8  p.m. 

Present:     Sir  William  P.  Meredith,  Commissioner. 
Mi;.  W.  B.  Wilkinson,  Law  Clerl. 

The   Commissioner:     I   understand   the   Employers'  Association  wishes  to 
present  a  statement. 

MR-  •'•  (;-  Merrick:     Your  Lordship,  I  represent  the  Employers'  Association 

Toronto,  an  organization  that  is  somewhat  allied  to  and  probably  embraces  a 

field  among  the  smaller  employers  of  labour  than  the  Canadian 

A.ssociati(  In   addition   to  those  engaged  in  some  process  of 

manufacture  we  also  have  in  our  membership  organizations  such  as  the  pavers  and 

;i1  c<>ntrai  ide  of  most  of  those  engaged  in  the  building  operations, 

trich  are  undeT  the  Builders'  Exchange.     The  general  argument  advanced  by  the 

Natives  of  the  Canadian  Manufacturers'  Association  is  agreeable  to  us  *   We 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  363 

have  been  working  more  or  less  in  unity,  because  in  a  discussion  of  this  nature 
there  are  certain  well  known  principles  which  require  to  be  incorporated  in  an  Act 
of  this  character,  and  which  are  recognized  as  being  advantageous  both  to  the 
workman  and  employer.  Mr.  Wegenast  has  outlined  these  to  our  entire  satis- 
faction. I  have  read  over  his  brief  with  great  interest,  and  he  covers  in  an 
elaborated  way  practically  all  the  principles  that  we  decided  upon.  There  is  one 
matter  which  I  think  has  not  been  alluded  to  here,  and  that  is  the  number  of 
accidents  which  have  taken  place  in  this  country  during  the  past  year,  and  I  have 
taken  from  the  Labour  Gazette  the  reports  of  the  accidents  taking  place  in  Canada, 
and  I  have  compiled  a  statement  of  them  under  their  various  classifications,  which 
may  be  of  interest  as  showing  the  ratio  in  the  different  employments. 


Statement  of  Employers'  Association  of  Toronto. 

To  the  Commissioner  appointed  to  consider  the  subject  of  Compensation  to  work- 
men for  injuries  sustained  in  the  course  of  their  employment. 

Sir, — It  is  generally  conceded  by  those  who  have  made  a  study  of  comparative 
legislation  with  regard  to  Workmen's  Compensation,  that  the  Act  at  present  in 
force  in  Ontario  is  unsatisfactory,  inadequate  and  by  reason  of  inviting  litigation, 
wasteful.  It  would  seem,  therefore,  to  be  the  duty  of  those  who  are  more  or  less 
brought  in  contact  with  accidents  of  this  character  to  assist  in  framing  a  measure 
that  would  meet  the  requirements  of  our  industrial  life,  and  one  which,  at  the 
same  time,  should  not  bear  too  heavily  on  provincial  industry. 

In  a  complex  question  such  as  this  it  is  advisable  as  far  as  possible,  to  establish 
the  principles  that  should  underlie  a  measure  of  this  character.  We  submit  the 
following  suggestions  which  we  believe  should  be  material  to  the  framing  of  the 
act  and  incorporated  in  its  provisions. 

\ 

\ 

1.  Work?nen's  Compensation  preferred.  The  act  should  be  framed  along  the 
lines  of  Workmen's  Compensation  and  not  of  Employers'  Liability. 

2.  Efficiency  and  Economy.  The  system  of  compensation  should  be  efficient 
and  economical,  and  as  large  a  proportion  as  possible  of  the  amount  paid  by  either 
the  employer  or  employee  should  actually  be  paid  out  in  compensation. 

> 

3.  Joint  Contribution.  We  believe  that  compensation  should  be  provided  by 
joint  contribution  from  both  the  employer  and  workman  such  as  may  be  found 
to  be  equitable  in  view  of  the  relative  number  of  accidents  occuring  by  reason  of 
(a)  hazard  or  risk;  (b)  fault  of  employer;  (c)  fault  of  employee. 

4.  Question  of  Negligence.  We  are  of  the  opinion  that  all  accidents  should  be 
the  subject  of  compensation  from  the  fund  contributed  to  for  that  purpose,  but 
that  gross  carelessness,  drunkenness  and  wilful  disobedience  to  orders  should  be 
penalized  in  some  way. 

5.  Periodical  Payments.  The  amount  awarded  in  compensation  should  be 
paid  periodically  and  riot  in  a  lump  sum.  It  should  be  made,  as  far  as  possible,  a 
substitution  for  the  wages  of  which  the  injured  workman  and  his  dependants  are 
deprived  by  the  injury. 


364  MINUTES  OF  EVIDENCE:  No.  65 


6.  Compensation  should  be  Sure.  It  is  impossible  through  ordinary  channels 
to  be  assured  of  the  continued  solvency  of  the  employer.  Some  provision  should 
be  incorporated,  however,  which  would  guarantee  compensation  being  paid  in  the 
event  of  failure  or  other  cause. 

7.  Expert  Supervision.  If  a  general  compensation  plan  is  decided  upon  it 
should  be  supervised,  enforced  and  the  rates  adjusted  by  experts  similar  to  those 
employed  by  insurance  companies.  Administration  of  the  system  should  be  on 
ordinary  business  lines  as  distinguished  from  the  procedure  in  the  courts  of  law. 

8.  Relief  from  further  Liability.  The  system  of  compensation  adopted  should 
relieve  employers  from  any  other  legal  liability. 

9.  Burden  of  Compensation.  The  cost  of  compensation  to  employer  or  work- 
men should  not  be  made  heavier  in  Ontario  than  in  any  other  of  the  Canadian 
Provinces. 

10.  General  Application.  The  plan  adopted  should  embrace  all  employers  and 
workmen  in  the  Province. 

It  is  conceded  that  it  would  be  advisable  both  to  employer  and  workman  if 
some  basis  of  compensation  could  be  arrived  at  which  would  be  so  certain  in  its 
operation  that  it  could  be  contemplated  at  the  beginning  of  the  term  of  employ- 
ment. The  right  of  an  employee  to  compensation  and  the  amount  in  case  of  injury 
could  be  known  in  advance,  and  the  liability  of  the  employer  being  ascertained, 
could  be  dealt  with  as  a  constant  factor  of  expense  in  the  ordinary  course  of 
business. 

It  is  most  desirable  that  the  uncertainty  of  compensation  through  litigation 
should  be  removed  and  the  ascertainment  of  the  payment  of  compensation  should 
be  made  as  nearly  automatic  as  possible.  The  trend  of  modern  legislation  has 
generally  recognized  the  claim  of  the  workman  to  compensation  for  injuries  incurred 
outside  those  resulting  from  the  employers'  negligence.  This  has  been  largely 
brought  about  by  the  consideration  of  the  causes  of  industrial  accidents  and  the 
desire  of  providing  legislation  that  would  more  nearly  coincide  with  existing  con- 
ditions than  with  theories  of  employment. 

It  has  been  established  that  it  is  almost  impossible  in  a  number  of  cases  to 
apportion  the  responsibility  for  accidents.  Statistics  covering  a  number  of  years 
and  embracing  a  large  number  of  cases  under  the  German  system  have  established 
the  following  ratio  of  causes  of  accident: 


- 


FauH   of  employer   17.30% 

FauU    of   workman    ,   29.74% 

FauH  of  both  employer  and  workman 4.83% 

ill    of    fellow-servant    5.31% 

1  'nil  voidable  accident  41.55% 

of  Cod     1.27% 

Contribution  to  Fund  by  Employees.  If  it  is  decided  to  recommend  legis- 
lation  amounl   of  compensation,  and  over  a  wider  field  than  is  at 

presenl  il  .  il  is  desirable  thai  employees  should  contribute  to  the  fund  out  of 

which  the  compensation  is  to  be  made. 

'*  !l  n  established  thai  such  .a  plan  would  remove  the  idea  of  charity  and 


1912 


WORKMEN'S  COMPENSATION  COMMISSION. 


365 


would  put  the  employee  ou  a  basis  of  independence  with  reference  to  the  amount 
coming  to  him  for  injury.  It  would  also  be  conducive  to  the  exercise  of  care  on 
the  part  of  the  workmen  knowing  that  while  the  injured  person  would  be  com- 
pensated, pari,  at  any  rule,  of  the  cost  of  the  accident  would  fall  on  the  employees 
generally.  It  is  also  certain  that  it  would  reduce  the  number  of  fraudulent  claims 
and  malingering  for  the  reason  that  honest,  conscientious  workmen  would  have  a 
personal  interest  in  the  fund  and  would  be  on  the  look-out  for  such  cases. 

It  may  be  of  value  in  the  present  connection  to  include  here  the  industrial 
accidents  that  have  taken  place  in  Canada  during  the  pasl  twelve  months  to 
December,  1911.  These  are  classified  under  diil'crent  headings  and  embracing  all 
occupations. 


Trade. 


Agriculture 

Mining 

Lumbering 

Fishing  and  Hunting 

Transportation — Railway 

Transportation — Navigation 

Transportation — Electric  Railway 

Miscellaneous  Transportation 

Railway  Construction 

Metal  Trades 

Building  Trades 

Wood  Working  Trades 

Food  and  Tobacco 

Textile  Trades 

Clothing  Trades 

Printing  Trades 

Leather  Trades 

Unclassified  Skilled  Trades 

Unskilled  Labour 

Public  Employees 


Killed. 


150 

119 
75 
25 

193 
33 

104 

3 

15 

95 

74 

10 

10 

4 

2 


58 
80 
15 


1,065 


Injured. 


179 

122 

110 

1 

292 

131 

36 

11 

19 

376 

188 

108 

44 

17 

9 

13 

8 

101 

134 

87 


1,986 


Total. 


329 

241 

185 

26 

4S5 

164 

140 

14 

34 

471 

262 

118 

54 

21 

11 

13 

8 

159 

214 

102 


3,051 


While  these  industrial  accidents  cover  the  whole  of  Canada  and  are  reported  in 
all  occupations,  still  for  the  purpose  in  Ontario  they  can  be  used  as  an  illustration 
of  the  proposition  that  will  likely  be  found  to  obtain  in  the  various  trades  and 
occupations  classified.  It  is  fair,  however,  to  assume  that  this  will  probably  embrace 
all  the  serious  accidents,  but  that  many  of  a  minor  nature  go  unreported. 

The  Compensation  Rate.  It  will  be  a  matter  of  extreme  difficulty  to  adjust 
the  scale  of  compensation  to  the  various  industries  when  considered  from  the  view- 
point of  the  interests  involved.  One  of  the  fixed  points  of  a  compensation  plan 
should  be  that  it  should  operate  equally  and  uniformly  in  respect  to  all  workmen 
included,  and  not  unequally  and  discriminateiy  according  to  the  financial  position 
and  occupation  of  the  employer.  Its  provisions  should  also  be  of  such  a  nature  as 
to  be  applicable  to  every  class  of  industrial  activity. 

The  history  of  pension  legislation  would  indicate  that  if  there  is  any  alter- 
ation in  the  original  rates,  it  is  to  be  expected  in  an  increase .  rather  than  in  a 
reduction.  So  that  an  initial  rate  should,  as  a  matter  of  policy  for  compensation, 
be  a  moderate  one.  It  could  be  also  urged  in  fairness,  that  if  the  employer  is  to 
be  made  responsible  for  injuries  beyond  his  fault  that  the  burden  imposed  should  be 
reasonable  and  not  exorbitant. 


366  MINUTES  OF  EVIDENCE:  No.  65 


The  Commissioner:  In  the  figures  you  have  given  is  there  anything  to 
indicate  the  extent  of  the  injury  ? 

Mr.  Merrick:  No,  it  is  just  a  bald  classification,  and  I  would  not  like  to 
urge  that  any  great  reliance  should  be  placed  on  this  tabulation,  other  than  probably 
the  comparison  of  the  amount  of  risk  that  is  liable  to  be  incurred  in  these  different 
occupations.  There  may  be  probably  some  correspondents  who  have  overlooked 
injuries  of  one  kind  and  another,  or  injuries  may  have  been  of  such  a  trifling 
nature  that  they  have  not  been  reported. 

The  Commissioner:  What  is  the  source  of  the  correspondents'  information? 
Just  what  they  can  pick  up? 

Mr.  Merrick  :     I  think  so.     That  is  all  they  put  forward. 

Mr.  Doggett  :     Were  those  figures  you  submitted  for  all  Canada  ? 

Mr.  Merrick  :     Yes,  just  for  the  year,  to  the  end  of  December. 

The  Commissioner:  In  your  organization  have  you  any  rule  about  your 
members  reporting  accidents? 

Mr.  Merrick:  No,  we  have  not.  I  do  not  think  there  is  any  organization 
that  has  a  regulation  of  that  character. 

The  Commissioner:     I  suppose  a  great  many  are  not  reported  at  all? 

Mr.  Merrick  :  The  accidents  of  a  more  or  less  trivial  nature  are  practically 
tried  on  the  spot,  or  looked  after  by  the  employer  himself,  who  pays  the  doctor's 
bills  and  wages,  and  they  are  never  brought  to  the  attention  of  the  public  officials 
or  the  correspondents  of  the  Gazette. 

The  Commissioner  :     The  Factory  Act  requires  every  accident  to  be  reported. 

Mr.  Burke,  (Factory  Inspector)  :     Yes,  within  six  days. 

Mr.  Gibbons  :  I  do  not  think  the  figures  can  be  correct.  You  gave  some 
figures  as  to  the  number  of  injured.  I  think  there  must  be  that  many  injured 
here  every  week.  The  Toronto  Railway  Company  would  think  they  got  off  lightly 
if  they  did  not  have  more  than  that  every  week. 

Mr.  Merrick:     These  are  industrial  accidents  of  all  kinds. 

'I'm:  Commissioner:  Mr.  Burke  says  they  have  reported  in  this  Province 
alone  over  a  thousand  accidents. 

Mi:.  Burke:     That  is  accidents  that  would  come  under  the  Factory  Act. 

Mr.  Merrick  :     My  grand  total  is  3,051  for  the  Dominion. 

The  Commissioner:     If  this  insurance  plan  were  adopted  would  it  not  be  very 
cult  to  get  at  the  small  employers  of  labour? 

Mr.  Merrick:     Yes,  in  one  sense  it  would,  for  this  reason,  that  as  my  friends 

on  the  other  side  know  there  is  a  steady  graduation  from  the  ranks  of  labour  into 

the  ranks  of  employers  going  on  all  the  time.       That  is  largely  confined  to  the 

aller  classes  of  cmp^ers  of  labour,  and  from  their  successes  generate,  in  a  great 

Dumber  of  instances,  into  larger  firms.     Now,  the  lives  of  these  small  employers 

•y.     At  least  the   lives  of  their  firms  vary  very  considerably.       Some  keep  in 

business  for  a  few  months  and  then  they  relapse  back  into  the  ranks  of  journeymen. 

If  they  succeed,  in  the  initial  stages  they  hire  very  few  men.     They  are  usually 

working  combinations  of  two  or  three  workmen,  and  as  the  business  expands  then 

hire  men. 

Tin:  COMMISSIONER:     They  would  be  partners,  practically. 

Mr.  MERRICK:     Yes,  but  as  their  business  expands  they  engage  other  help, 
i  particularly  the  case  wilh  regard  to  such  employments  as  the  plumbing 
rade,  or  the  glazing  trade,  or  the  painting  trade,  where  very  much  capital  is  not 
required  in  ordeT  to  set  up  in  business. 

M^  W"]  t:     There  La  ;i  provision  in  one  of  the  acts,  I  think  it  is  the 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  367 

State  of  Washington,  where  the  employer  is  allowed  to  come  in  if  he  is  on  the 
pay-roll. 

The  Commissioner:  Yes,  but  just  what  that  means  may  be  uncertain.  I 
suppose  there  are  a  number  of  the  smaller  industries  where  the  employer  works 
alongside  of  his  men. 

Mr.  Merrick:  Yes,  in  most  of  the  smaller  industries  they  do  that. 

The  Commissioner:  There  is  a  pretty  fair-sized  bricklaying  firm,  Ham  & 
Eeid,  and  they  both  work  along  with  their  men. 

Mr.  Merrick:  It  is  very  difficult  in  the  early  stages  to  really  classify  them 
as  employers  or  as  journeymen  because  they  fluctuate  to  and  fro. 

The  Commissioner  :     If  Mr.  Wegenast's  idea  were  carried  out  in  an  insurance 
scheme,  could  the  men  you  are  speaking  of  be  depended  upon  to  bring  in  a  report  ■ 
on  the  men  that  weren't  coming  in  to  pay  up  ? 

Mr.  Merrick  :  The  only  way  they  could  really  be  brought  in  I  think  is  under 
some  penalty  regulation. 

The  Commissioner:     What  use  is  a  penalty  if  a  man  has  nothing? 

Mr.  Merrick  :  It  is  a  question  of  his  continuance  in  business.  If  it  was  an 
obligation  which  threatened  the  security  of  his  business  unless  he  did  so,  that 
would  be  an  inducement  for  him  to  report. 

The  Commissioner:     Do  many  of  these  smaller  men  join  your  organization? 

Mr.  Merrick:  Yes,  some  of  them  do,  and  they  lapse  back  into  the  ranks  of 
journeymlen.  It  all  depends  on  the  prosperity  of  the  country  at  the  particular 
moment. 

Mr.  Wegenast  :  What  would  you  think,  Mr.  Merrick,  would  be  the  prospect 
of  these  smaller  employers  voluntarily  availing  themselves  of  the  act,  if  provision 
was  made  for  them   by  way  of  insurance? 

Mr.  Merrick  :     In  what  way  ? 

iMr.  Wegenast:  Take  the  case  of  a  partnership,  say  two  men  carrying  on 
the  plumbing  business  with  perhaps  an  apprentice.  Would  they  pay  in  on  their 
pay-roll  and  thus  insure  themselves  and  the  apprentice? 

The  Commissioner:     Not  making  it  obligatory? 

Mr.  Merrick  :  I  am  rather  inclined  to  think  they  would  not,  for  this  reason, 
that  generally  the  attention  of  men  of  that  character  is  concentrated  almost 
entirely  on  either  following  their  business,  or  acquiring  new  business.  They  have 
not  the  purview  of  a  larger  employer,  and  they  may  not  be  sensible  to  the  risk 
they  run. 

The  Commissioner:     I  suppose  they  think  they  can  insure  themselves9 

Mr.  Merrick:     Pretty  nearly. 

The  Commissioner:  Has  it  ever  been  thought  under  an  insurance  scheme 
it  would  be  practicable,  supposing  you  did  not  adopt  the  plan  of  compulsory  con- 
tributions, to  allow  him  to  contribute  and  give  him  a  larger  indemnity  if  he  did; 
would  that  be  practicable  on  a  business  line? 

Mr.  Wegenast:  We  went  into  that  somewhat  thoroughly.  It  was  a  favourite 
idea  of  Mr.  McNaught's,  if  I  may  use  his  name  in  connection  with  it,  and  it  has 
been  carried  into  practice  by  Mr.  McNaught  in  his  own  watch  case  establishment. 
He  insures  his  men  under  a  collective  policy  for,  I  think,  $1,500,  which  is  allowed 
by  the  Employers'  Liability  Act  in  this  Province,  but  if  the  men  contribute  a  small 
additional  premium  by  way  of  deduction  from  their  wages  they  are  insured  for  an 
extra  amount.  He  works  the  thing  out  in  such  a  way  as  to  make  it  some  induce- 
ment for  them  to  take  the  additional  insurance,  but  we  thought  a  general  scheme 
of  that  kind  woud  not  be  made  use  of  by  the  workmen.    The  class  of  men  for  whom 


368 


MINUTES  OF  EVIDENCE:  No.  65 


ilation  is  intended  is  not  the  class  of  men  who  set  aside  even  a  small 
amount. 

The  Commissioner:     Would  not  the  men  getting  up  in  years,  or  the  men 
th  families  be  likely  to  avail  themselves  of  making  that  small  contribution,  when 
perhaps  the  single  man  might  not  feel  like  doing  it? 
Mr.  Wegenast:  Yes. 

The  Commissioner:  The  doubt  I  have  is  whether  it  could  be  worked  as  a 
business  scheme  so  as  to  get  a  proper  financial  basis  for  it. 

Mr.  Wegenast  :  Yes,  and  the  man  who  might  do  it  at  one  time  might  drop 
out,  and  there  would  be  a  great  difficulty  in  simply  the  book-keeping  end  of  it  so  as 
to  know  when  the  man  was  insured,  and  when  he  wasn't  insured  for  the  extra 
amount.  So  long  as  you  leave  it  voluntary  the  large  proportion  will  not  take 
advantage  of  it. 

The  Commissioner:  Well,  who  would  the  workman  swear  at  when  the  ten 
per  cent,  was  deducted  from  his  wages? 

Mr.  Wegenast:     He  would  likely  swear  at  the  employer. 
The  Commissioner  :     Or  the  State  that  did  it  ? 

Mr.  Wegenast :  No,  I  think  he  would  probably  swear  at  the  employer,  but  I 
am  anticipating  something  I  was  going  to  say  later,  that  their  irritation  may  be  the 
means  of  inducing  an  amount  of  care  or  an  amount  of  attention  on  the  part  of  the 
employee  which  could  not  be  evoked  without  it.  Then  there  is  always  this  pos- 
sibility, that  the  employer  might  not  take  advantage  of  it,  beoause  I  think  the  large 
majority  in  fact  of  the  larger  employers  at  all  events  would  find  it  to  their  inter- 
ests not  to  collect  that  amount. 

The  Commissioner:     Now,  is  that  not  cutting  away  one  of  your  arguments? 
Mr.  Wegenast:    Yes. 

The  Commissioner:  Then  the  inducement  of  the  man  to  be  careful  for 
himself  and  fellow- workmen  would  be  gone. 

Mi:.  Wkgenast:     I  am  suggesting  a  section  something  like  this,  a  section 
allowing  the  employer  at  his  option  to  deduct  a  certain  percentage  of  the  insurance 
premium  from  the  wages  of  the  workmen,  on  due  notice  to  the  workmen  that  that 
oing  to  be  done,  or  on  notice  to  the  workman  on  entering  his  employment. 
Now,  the  way  it  would  work  out  practically  I  think  would  be  this.       The  large 
employer  would  not  probably  enforce  the  provision  for  reasons  that  need  not  be 
into  now,  but  he  would  have  it  to  hold,  as  it  were,  over  the  workmen.     Sup- 
found  an  amount  of  carelessness  in  using  certain  appliances,  or  whatever 
ssness  consisted  in,  he  could  post  up  a  notice  saying  if  this  rate  of 
i  kept  on,  or  if  these  regulations  were  not  enforced,  whatever  it  was  that 
bring  home  to  the  workmen,  the  rule  as  to  contribution  would  be 
aid  call  his  employees  together  and  could  say,  now.  the  accident 
in  my  shop  so  and  so,  and  the  rest  of  the  employers  in  my  class  are 
mil   they  are  going  to  put  me  in  a  higher  class  or  in  for  a  higher 
rate,  and  if  (bal  is  don    I  will  have  to  charge  this  percentage  against  you;  I  will 
e  to  pul  thai  rule  into  force.     It  would  be  a  most  elastic  way  I  think  of  bring- 
the  impor  neventive  care  home  to  the  employees  themselves. 

'In  i   Cow  >nter:     Does  the  employer,  where  a  man  continues  to  disregard 

his  own  safety  and  t        of  those  who  are  working  with  him,  ever  exercise  his  right 
>.'■  don't  want  you  any  more? 
Mn.  Wi<;i  \\kt:     If  he  does  he  is  subject  to  the  danger  of  a  strike.     There 
is  thai  always  to  be  coi  !.     If  the  reasons  for  dismissal  are  not  approved  of 


1912  WORKMEN'S  COMPENSATION   COMMISSION. 

in  the  eyes  of  the  Union  to  which  his  workmen  may  happen  to  belong,  he  is  always 
up  against  that  difficulty. 

The  Commissioner:  You  see  in  so  many  of  these  cases  the  carelessness  of 
the  man  not  only  involves  himself,  but  those  who  work  with  him. 

Me.  Wegenast:     Yes.  there  is  also  that  feature  to  be  considered.     It  is  an 
idea  of  my  own,  but  it  looks  to  me  like  one  of  the  easiest  and  most  elastic,  and  n 
salutory  forms  that  the  contribution  from  the  workmen  could  lake. 

Me.  Bancboft:  Mr.  Merrick,  do  you  represent  most  of  the  Employers'  Assoc- 
iations all  over  Canada? 

Mb.  Merrick:     Oh  no,  Toronto  and  some  towns  in  Ontario. 

Mr.  Bancboft:  I  was  going  to  ask  you  if  the  manufacturers  or  employers 
in  Manitoba.  Alberta,  Saskatchewan  or  British  Columbia  in  framing  up  the  acts 
they  have,  which  are  largely  on  the  British  plan,  ever  suggested  contribution-  from 
the  workmen? 

Mb.  Merrick:     I  couldn't  state  that. 

Mr.  Wegenast:  I  would  like  now  if  your  Lordship  would  hear  Mr.  W.  B. 
Tindall.  Mr.  Tindall  is  a  member  of  the  committee  under  which  I  have  been 
working,  and  is  in  touch  with  all  the  proceedings,  and  would  like  to  make  a  state- 
ment as  to  the  attitude  in  general. 

Mr.  Tixdall:  Your  Lordship,  and  gentlemen.  I  have  only  a  few  remark; 
to  make.  I  take  it  that  Mr.  Wegenast  has  presented  the  matter  pretty  fully  as 
regards  the  act,  the  reasons  for  the  act,  and  the  outline  generally,  and  it  is  hardly 
worth  while  taking  up  time  in  going  over  the  ground  that  he  has  probably  gone 
over,  working  under  he  instructions  of  the  committee  to  which  I  have  the  honor 
to  belong.  There  are  several  features  of  it,  however,  that  it  seemed  to  me  your 
Lordship  might  care  to  hear.  I  presume  it  will  be  looked  upon  if  such  an  action 
is  taken,  and  if  recommendations  are  made,  that  the  solution  of  this  vexed  question 
of  workmen's  compensation  for  injuries  in  the  hazards  of  the  different  occupations 
that  a  workman  may  be  engaged  in  should  take  the  form  of  a  State  act,  or  State 
insurance  form.  Then  the  members  of  the  legislature  would  want,  and  quite 
properly  so.  that  they  would  be  backed  up  by  public  opinion  in  order  to  satisfy 
them  in  their  minds  that  this  would  be  a  satisfactory  solution  to  the  majority  of 
the  people  under  whose  suffrages  they  were  representatives  in  the  House  of  Parlia- 
ment that  might  be  deliberating  on  this  question.  Now,  I  take  it  that  the  evolution 
that  is  going  on  in  the  world  at  the  present  time  is  altering  matters  to  a  very 
great  extent.  I  refer  to  this  because  I  can  hardly  take  it.  that  although  there  is  a 
difference  of  opinion  maybe  between  labour  and  capital,  thai  there  is  an  actual 
conflict  between  labour  and  capital.  It  seems  to  me  that  labour  is  just  as  much 
interested  in  having  this  in  a  proper  and  right  form  as  capital  is.  Moreover.  I  go 
further  than  that.  I  say  as  it  appears  to  me.  looking  back  from  my  knowledge  of 
business  for  thirty  or  forty  years,  that  it  is  in  an  altogether  different  shape.  Capital 
has  assumed  to-day  and  is  to-day  in  a  very  much  different  shape  than  what  it  was 
in  those  times.  My  father  happened  to  be  somewhere  about  1820  on  the  continent 
of  Europe,  engaged  with  one  of  the  best  engineering  firms  that  ever  started  in 
business  there.  Now.  in  his  day  the  majority  of  the  manufacturers  were  private 
individuals.  There  was  very  little  company  organization  in  those  times.  It  was 
generally  the  father  and  the  son,  and  the  business  was  transferred  down,  and  the 
difference  of  opinion  between  labour  and  capital  came  directly  between  the  one  man 
who  had  the  money  and  the  other  man  who  did  the  work.  Now.  to-day  evolution 
has  changed  things  both  here  and  in  the  United  States.  I  do  not  think  there  are 
any  of  us  that  take  the  public  press,  but  can  see  the  enormous  progress  that  is  beins: 
24  l. 


370  MINUTES  OF  EVIDENCE:  No.  65 


way,  that  nearly  every  undertaking  is  formed  on  the  joint  stock 

inciple.     That  means  that  a  large  amount  of  shares,  from  $50  to  $100 

ed  to  the  public  generally,  and  I  take  it  that  any  thrifty  workingman  who 

money  is  looking  for  a  safe  investment  for  that  money,  and  that  invest- 

lent  to  a  certain  extent  is  in  the  purchase  of  listed  shares  in  such  companies  as 

listed  on  the  Stock  Exchange,  or  private  enterprises  that  are  not  listed.  So 
these  men  may  be  working  in  a  shop  and  still  be  the  capital.  He  may  be  the 
employer  as  well  as  the  employee,  and  in  several  easels  I  know  of  that  condition 
of  things  obtains.  Therefore  if  this  goes  on  and  if  the  thrifty  man,  the  man  who  is 
putting  his  money  by  and  getting  his  returns,  has  got  to  look  for  investments,  he 
_roing  to  make  his  investments  in  joint  stock  companies  or  banks,  or  other  things 
that  furnish  a  means  for  him  to  do  that.  Take  banks,  for  instance.  Our 
banks  to-day  are  in  this  position,  that  the  workingman  who  has  got  his  money  de- 
posited in  a  bank  is  vitally  interested  in  the  life  of  every  concern  in  this  country. 
There  is  not  a  bank  in  the  country  that  is  not  financing  to  a  larger  or  less  extent  all 
kinds  of  industries,  and  to-day,  if  the  banks  did  not  finance  those  industrial  con- 
cerns they  would  cease  to  exist,  they  couldn't  get  on  in  the  way  they  are  doing,  and 
consequently  the  men  could  not  get  work  because  they  would  not  have  the  means  to 
employ  them.  Now,  he  is  interested  in  that.  He  is  interested  that  nothing  should 
be  done  that  would  interfere  with  progress  and  of  capital  getting  a  right  and 
proper  return  so  that  there  may  be  profits  in  which  he  can  share.  The  idea  I  want 
to  convey  is  that  he  is  more  interested  than  one  would  think  in  the  other  side  of  the 
question,  at  which  as  a  general  rule  he  is  not  looking.  The  whole  State  all 
the  way  through  is  interested  in  a  proper  solution  of  this  question.  I  think  the 
majority  of  men  to-day  who  think  and  who  read  will  concede  that  there  are  hazards 
incidental  to  every  industrial  occupation,  and  more  so  with  those  in  which  machinery 
is  more  or  less  used  for  the  conversion  of  a  raw  product  into  a  manufactured 
article.  A  man  says:  "Here  I  am  living  in  this  country  and  in  this  community, 
and  some  portion  of  this  community  has  got  to  furnish  me  an  honorable  employ- 
ing ii  for  my  -time  at  an  equitable  rate."  He  cannot  get  a  rate  beyond  the 
amount  that  that  industry  can  profitably  pay.  You  cannot  put  a  greater  burden  on 
an  industry  than  it  can  bear.  So  the  question  turns  around  in  a  circle.  Those 
who  can  remember  some  years  back  will  know  that  our  rate  of  living  is  very  much 
higher  now  than  it  was,  and  it  is  all  brought  about  possibly  by  this  condition  of 
things,  more  or  less. 

I  have  not  come   across  any  of  my  colleagues   in  discussing  the  matter   at 
;|IIV  of  our  A  ion  meetings,  who  expressed  an  opinion  adverse  to  the  general 

broad  principle  laid  down  that  tho  workman  who  is  injured  is  entitled  to  compen- 
sation, is  entitled  to  a  proper  compensation,  and  to  a  compensation  that  is  given 
by  the  manufacturers  willingly  and  liberally.  Then  the  whole  question  that  we  are 
now  t iving  to  solve  is  how  this  compensation  shall  be  .given  with  the  least  amount 
of  practical  difficulty,  and  that  will  work  out  for  the  benefit  of  the  men,  and  that 
w'"  "",  be  too  greal  a  burden  on  the  industry.  Those  general  principles  all  the 
way  through,  outlined  by  Mr.  Wegenast,  seem  to  mo  to  furnish  a  fairly  good  way, 
if  carried  oul  and  worked  out  in  detail,  to  solve  the  difficulty.  One  thing  that 
"•'■  me  more  or  less  in  the  doliberations  I  have  been  at,  is  that  our  friends  of 
the  labour  side  of  the  ho  em  to  think  that  it  would  be  better  that  they  should 

contribute  to  this  State  fund.  If  it  is  going  to  be  managed  by  the  State  then 
Iho  ad  should  be  framed  in  nuch  a  way  that  the  fund  should  ho  available  to  everv 
workman,  no  matter  whal  his  .  iss  may  be,  and  if  he  wants  to  come  into  it  and 
contribute  to  the  fund,  he  should  gel  the  benefrl  of  the  fund.     I  have  not  been  at 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  371 

all  the  deliberations  here  and  I  do  not  know  hrvw  far  evidence  has  been  brought  in 
on  that,  but  I  know  that  the  suggestion  has  been  made  that  several  'of  oar  very 
large  manufacturing  establishments  have  schemes  working  very  satisfactorily  both 
to  themselves  and  to  their  own  men,  and  it  was  suggested  that  possibly  those  might 
be  retained  in  lieu  of  any  state  act  that  might  come  in.  Mj  contention  on 
that  is  that  I  do  not  see  how  you  are  going  to  practically  work  that  out.  It  seems 
to  me  the  solution  of  the  difficulty  is  altogether  a  state  act,  or  very  much  as  we 
are  going  on  now.  I  do  not  see  how  you  are  going  to  take  part  of  an  industry, 
or  portions  of  those  industries,  and  have  them  manage  that  part  of  the  industry 
ami  tire  state  the  other  part,  and  have  it  work  out  any  way  economically  for  the 
State  or  the  people  who  are  getting  the  benefits  from  it. 

Another  thing,  it  seemed  to  me  that  the  Government  was  the  best  medium  of 
taking  care  of  these  things.       It  has  always  seemed  to  me  that  such  things  as 
insurance  and  schemes  of  that  kind  were  a  proper  function  for  any  Government  to 
take  up,  and  I  think  originally  should  have  been  taken  up  by  the  Government 
rather  than  by  private  enterprise.     It  seems  to  me  if  there  is  anything  that  is 
proper  for  Government  control  and  Government  handling  it  is  these  Workmen's 
Compensation  Acts,  and  sick  benefit  schemes,  and  all  that  sort  of  thing.     Now, 
if  that  is  taken  up  then  I  take  it  that  all  the  parties  that  are  going  to  benefit  by 
that  should  contribute  in  some  way  or  another.     The  extent  of  the  contribution 
would  have  to  be  worked  out,  but  I  cannot  see  any  difficulty  in  the  way  to  the 
workingmen  contributing.     I  know  in  our  own  works,  not  as  far  as  the  iron  work 
is  concerned,  but  as  far  as  our  wood-working  industries  are  concerned,  they  have 
schemes,  and  I  am  connected  with  several  of  them,  and  I  have  spoken  to  our  men 
a  good  deal  about  it  and  nearly  all  of  those  I  have  spoken  to  prefer  contributing 
to  it.     They  voice  the  opinion  to  me  that  they  would  rather  contribute  than  not. 
It   seems   to   me   if   I   were   a   workingman   that   that   is   the   position   I   would 
take,  that  I  would  rather  contribute  to  it  than  not  contribute  to  it.       The  con- 
tribution can  be  arranged  in  such  a  way  that  it  will  not  be  a  burden  to  the  man,  and 
as  to  the  means  for  collecting  there  should  not  be  any  difficulty.     I  know  in  the 
iron  works  some  years  ago  the  men  got  up  a  scheme  of  their  own  by  which  they 
wanted  to  have  the  benefit  of  the  scheme  for  themselves.     We  said  we  were  perfectly 
satisfied  with  that.     They  wranted  their  own  officers,  their  own  treasurer,  and  their 
own  secretary.     We  did  not  interfere  with  it  in  any  way,  only  they  asked  us  to 
'allow  them  to  collect  the  money  for  it  on  the  regular  fortnightly  pay-roll,  and  that 
was  deducted.     That  worked  along  for  a  time  but  it  did  not  work  out  altogether 
satisfactorily,  because  a  certain  number  of  the  men  did  not  agree  with  some  of  the 
details.     Where  the  thing  broke  down  was,  they  had  a  meeting  and  they  elected  a 
doctor  that  was  to  attend  them  in  the  case  of  sickness  or  injury.     Several  of  them 
got  injured  and  they  had  medical  men  of  their  own,  and  they  wanted  to  have  him 
instead  of  this  man  they  all  had  agreed  upon,  and  consequently  one  wanted  to  drop 
out  and  the  next  one  wanted  to  drop  out.  and  it  did  not  work  out.     But  that  was 
not  any  fault  of  the  system.     It  was  just  because  the  men  could  not  agree,  and  were 
not  satisfied   to  go   on.        It   seems  to  me    if   the   state  takes   hold   of  it   in   any 
way  it  should  work  out  practically  and  economically  for  all  persons  concerned.     I 
cannot  see  that  any  one  would  argue  for  a  moment  that  you  can  get  these  schemes 
without  any  trouble  and  without  any  difficulty.     There  will  be  difficulty,  but  I  do 
not  think  any  of  the  difficulties  are  insurmountable  or  any  that  cannot  bo  got  over. 
I    do    not    know    that    I    have    anything    further    to    say    than    this,    that    I 
noticed  an  article  in  the  Accountant*'  Journal,  of  England,  which  is  the  authority  on 
such  matters.     I  haven't  got  it  with  me,  but  it  was  about  some  trouble  and  diffi- 


MINUTES  OF  EVIDENCE:  No.  65 


they  have  met  with  in  England.     The  editor  was  discussing  the  proper 
ing  of  what  he  calls  clubs  over  there.     Now,  it  turned  out  they  had  two  cases 
:»lice  court.   Over  there  in  one  of  these  large  industrial  concerns  the  foreman 
ory  was  the  treasurer  of  one  of  these  so-called  clubs,  and  the  men  who  were 
\  under  him  subscribed  to  the  club  so  many  shillings  or  pence  a  week,  and 
e  to  loan  this  money  out.     They  were  to  have  so  many  members.     It  was 
icthing  on  a  building  and  loan  association  scheme  the  same  as  we  have  had  in 
5  country,  but  this  money  was  loaned  not  for  the  purposes  of  building  a  house 
for  buying  a  house,  but  for  tiding  the  members  of  the  club  over  any  difficulties 
they  might  be  in  through  sickness  overtaking  them,  or  wanting  some  money  for 
household  purposes,  or  something  of  that  kind,  and  I  think  in  three  or  four  cases 
Jesuit  has  been  most  disastrous.     This  man  had  got  the  money,  and  he  was  not 
a  man  who  was  used  to  handling  money  carefully  and  well.     In  one  case  the  man 
did  not  consider  it  was  necessary  that  he  should  keep  books  of  any  kind  or  nature, 
but  as  a  friend  of  mine  once  told  me,  who  was  leaving  a  business  that  he  had  been 
id   to  and  embarking  into  the  lumber  business — he  said  "Mr.  Tindall,  I  can't 
understand    why    there    are    so    many    books    necessary.       When    I    kept    hotel 
all  the  money  that  came  in  I  put  in  one  pocket,  and  all  the  money  I  wanted  to  pay 
out  was  in  the  other  pocket,  and  when  the  pocket  was  empty  that  settled  it.     I  said, 
'Vim  can't  run  a  lumber  business  that  way,"  and  he  found  out  that  he  could  not 
run  it  in  that  way,  although  he  tried  it.     Now,  this  man  kept  his  books  in  the 
same  way,  with  the  result  that  when  the  end  of  the  year  came  instead  of  their 
being  any  funds  to  divide  among  the  different  members  of  the  club  and  have  some 
profit  out  of  the  two  shillings  and  a  penny  a  week,  or  whatever  they  paid  into  it, 
they  {oun<\  the  funds  were  all  gone,  and  the  man  had  a  police  court  case  hanging 
over  him.     This  was  not  the  only  case.     They  pointed  out  this  was  a  thing  that  was 
prevailing.     These  clubs  I  am  speaking  of  are  not  registered.     There  is  a  Benevo- 
lent Clubs  Act,  or  something  of  that  kind,  and  they  are  registered  in  England.     It 
is  under  the  Friendly  Societies  Act.     These  companies  are  outside  the  Friendly 
Societies  Act,  and  this  editorial  rioints  out  there  was  no  way  of  getting  at  them,  and 
furthermore  they  pointed  out  the  greatest  difficulty  they  had  was  the  influence 
that  the  foreman  had  over  these  men,  that  these  men  felt  if  they  did  not  contribute 
1"  i  b  of  which  this  foreman  was  treasurer  that  they  might  look  somewhere 

for  work.  Now,  that  was  something  the  employer  had  nothing  whatever  to  do 
with.  These  foremen  were  not  representing  him,  they  were  representing  them- 
selves, lint  they  used  their  positions,  and  that  shows  one  of  the  many  phases  of 
this  question. 

Mi:.  Bancroft:     T  was  jus!  going  to  say.  your  Lordship,  while  we  are  on  this 

subjecl  thai   I  would  like  in  poini  out  tin's  little  bit  of  evidence  that  was  put  before 

Employers'  Liability  and  Workmen's  Compensation  Commission  in  the  Senate 

of  the  ;        -  by  Mr.  Miles  Dawson,  the  actuary  that  we  have  heard  quite 

a   little  aboul   already. 

T]       I  inks:  Ee  will  be  here  on  Tuesday  evening. 

MR.  Bancbofg  :  I  jusl  w.-mt  to  draw  your  attention  to  this.     He  was  speaking 
the  German  3ystem,  and  what  had  happened  there.  Senator  Chamberlain  says: 
'Your  proposition   is  not   to  tax  thi  ral   public,  but  the  owners  of  businesses 

to  be  regulated  in  accordance  with  the  pay-roll,  as  they  do  in  'Germany? 

'  Mr.  Dawson:  Precisely;  thai  the  central  Government  should  levy  the  tax  on 

••'II  employers,  or  all  emplo  of  the  particular  class  thai   you  embrace  in  your 

You  will   not    need   to  pay  attention   to  any  restrictions  to  interstate  com- 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  .:;:; 

merce  whatever.  You  will  find  this  power  is  not  limited  by  the  enumerated  powers 
of  the  Constitution.  It  is  an  excise  tax  a  tax  that  may  be  collected  from  all  en- 
gaged in  that  occupation,  corporations  or  individuals,  and  should  be  a  tax  in  pro- 
portion to  the  hazards  of  the  occupation,  and  upon  its  pay-roll. 

"Mr.  Brantley:  Would  that  be  a  direct  tax? 

"Mr.  Dawson:  It  would  not  be  a  direct  tax.  It  would  be  an  excise  tax.  I  am 
giving  you  ample  authorities  on  that. 

■•'the  Chairman:  Does  you  scheme  include  any  tax   on   the  employee? 

"  Mr.  Dawson :  That  is  with  you.  In  my  judgment  no  tax  should  be  levied 
on  the  employees  to  pay  the  consequence  of  accidents  arising  out  of,  or  in  the 
course  of  employment.  It  would  be  wiser,  however,  to  have  this  extend  so  as  to 
protect  employees  against  non-occupational  accidents  as  well:  possibly  against  sick- 
ness also;  and  if  that  were  done,  undoubtedly  a  tax  should  also  be  levied  against 
employees.  It  may  be  wise  even  to  do  so  in  other  cases.  Personally  I  do  not  re- 
commend it. 

"Mr.  Moon:  In  Germany,  there  is  a  tax  on  employees? 

"  Mr.  Dawson :  It  is  only  because  they  insure  them  against  sickness  and  non- 
occupational accidents." 

Then  just  another  quotation: 

"  The  Chairman :  May  I  interrupt  you  there  ? 

"  Mr.  Dawson :  Certainly,  yes. 

"  The  Chairman :  Do  you  think  it  is  wise  in  this  scheme  to  impose  a  tax  upon 
the  workman  as  well  as  upon  the  employer  ?  In  other  words,  would  it  tend  to  make 
him  more  careful? 

"  Mr.  Dawson :  In  my  judgment,  if  you  only  provide  for  the  payment  of  com- 
pensation to  the  workman  when  injured  because  of  an  accident  while  at  work,  i.e., 
arising  out  of  his  employment,  you  ought  not  to  assess  any  portion  of  the  tax 
upon  the  workman,  because  to  start  with,  that  is  not  the  way  to  get  it  into  the 
price  of  the  product,  except  by  his  forcing  wages  up,  which  is  an  unpleasant  way; 
second,  because  if  you  did  so,  the  portion  of  it  which  you  would  impose  on  the 
workman  would  be  so  small  (and  that  has  been  the  experience  in  other  countries) 
as  not  to  have  any  marked  effect  in  that  direction.  I  am  of  the  opinion  that  the 
great  public  purpose  we  have  been  discussing  calls  for  the  civilized  method  of 
•dealing  with  this,  which  is  to  protect  the  workman  of  the  United  States  against 
the  effects  of  sickness,  and  non-occupational  accidents  as  well,  through  these  asso- 
ciations, in  which  case  they  should  be  required  to  pay  a  tax.  and  I  may  say  that 
in  such  case  they  will  not  only  pay  the  tax,  but  they  will  pay  it  willingly  and  en- 
thusiastically, with  an  amount  of  acclaim  which  it  is  not  possible  for  the  gentle- 
men within  the  sound  of  my  voice  to  credit  at  this  time.  The  workmen  of  the 
United  States  are  standing  day  after  day,  as  to  themselves  and  their  families, 
under  the  shadow  of  disaster.  The  conception  of  this  matter  as  dealing  with  in- 
dustrial accidents  is  already  a  mistaken  one,  and  we,  as  the  most  civilized  country 
in  the  world,  absolutely  in  the  van  in  the  most  important  respects,  ought  not  to 
tail  in  behind  the  rest,  hut  should  go  clear  to  the  front, 

"The  Chairman:  I  think  you  are  quite  right  in  saving  workmen  would  quite 
willingly  contribute  to  this. 

"Mr.  Dawson:  They  will  not.  in  my  judgment,  contribute  willingly  to  any 
considerable  amount  to  a  fund  out  of  which  injuries  and  deaths  due  to  industrial 
accdents  are  compensated. 


MINUTES  OF  EVIDENCE:  No.  65 


■•  The  Chairman  :  My  observation  has  been  that  poorer  people  are  more  will- 
am]  they  always  have,  been,  to  help  one  another. 

'  Mr.  Dawson:  But  they  will  not  willingly  contribute  to  any  considerable  ex- 
tent to  a  tax  which  is  raised  purely- for  the  purpose  of  covering,  industrial  accidents. 
That  has  not  been  the  experience  anywhere  in  the  world,  and  I  am  sure  will  not 
be  here.  But  if  it  is  made  a  comprehensive,  civilized  plan  for  keeping  working  men 
and  families  out  of  the  poorhouse  when  disaster  comes  upon  them,  they  will  not 
only  contribute,  but  they  will  contribute  with  an  amount  of  satisfaction  and  en- 
thusiasm which  will  be  absolutely  astounding  to  some  people  in  this  country  who 
think  workmen  would  regard  it  as  tyrannical." 
That  is  his  statement  before  the  Senate. 

The  Commissioner:  I  suppose  we  will  see  in  a  year  or  two,  in  the  work- 
ing out  of  Lloyd- George's  Bill,  how  that  will  work  out. 

Mr.  Wegenast  :  I  am  quite  in  touch  with  Mr.  Dawson's  views  on  that.  I  was 
under  the  impression,  not  when  I  asked  Mr.  Boyd  to  come,  but  sometime  after- 
wards, that  he  was  absolutely  opposed  to  contribution  on  the  part  of  the  workmen, 
and  that  the  section  in  the  Ohio  Act  had  been  inserted  against  his  wishes.  I  don't 
know  how  I  got  the  impression,  but  that  was  my  impression.  It  is  a  matter  of 
no  concern  to  me  particularly  whether  Mr.  Dawson,  or  Mr.  Boyd,  or  Mr.  Preston, 
or  any  other  men  we  might  bring  before  your  Lordship,  believe  in  contribution  or 
not.  So  far  as  our  Association  is  concerned,  I  think  I  can  safely  say  we  have  an 
absolutely  open  mind  on  that  as  well  as  anything  else,  and  I  can  quite  conceive 
of  the  attitude  of  the  New  England  manufacturers  to  whom  Mr.  Boyd  has  re- 
ferred as  being  entirely  opposed  to  contribution.  There  are  other  factors  entering 
into  the  question  with  which  I  am  afraid  our  labour  friends  have  not  reckoned.  It 
looks  at  first  blush  that  here  was  something  to  fight  over  and  fight  to  a  finish,  but 
it  is  not  the  attitude  with  which  we  are  approaching  it  at  all.  I  am  willing  to 
place  my  arguments,  so  far  as  1  have  any,  before  your  Lordship,  and  before  the 
men,  and  in  fact  leave  it  to  the  labour  men  themselves  to  say  whether  they  are  just 
and  reasonable. 

Mr.  Bancroft:  I  think,  Mr.  Wegenast,  it  would  be  fairer  if  you  stated  the 
employers  from  the  actuarial  standpoint  are  interested,  and  from  our  standpoint 
the  one  thing  that  is  important  is  whether  the  workmen's  wages  shall  be  deducted 
or  decreased,  and  Mr.  Dawson  says  in  no  place  in  the  world  is  that  acceptable 
willingly,  or  has  been,  to  the  working  class. 

Mr.  Wegenast:  You  have  not  given  his  qualifications  to  that  in  making  your 
Btatement,  but  I  do  not  think  it  is  of  any  particular  importance. 

The  Commissioner:  He  will  be  here  to  speak  for  himself. 

Mi:.  Bancroft:  I  do  think,  your  Lordship,  when  it  was  the  working  class 
who  broughl  th  \  up,  who  asked  for  the  Commission,  and  who  asked  the  Premier 
for  quite  a  while  before  it  was  appointed,  to  appoint  the  Commission,  and  after 
the  Commission  was  appointed  have  done  all  they  can  to  bring  evidence,  that  it 
rtiould  nd  be  though!  or  said  thai  we  have  not  taken  this  thing  in  a  serious  light. 
We  are  nol  looking  at  ii  from  the  working-class  point  of  view  alone,  but  we  have 
;|  'i-'1'  to  defend  what  we  think  are  the  serious  considerations  of  the  working- 
class  of  this  l'i-n\  ince. 

Mr.  Wegenast:  I  do  no!  think  ii  is  quite  fair,  your  Lordship,  and  I  do  not 
think  it  right  that  the  inference  to  be  taken  from  Mr.  Bancroft's  remarks  should 
remain   unchallenged.     The  inference  has  been  brought  out  here  on  a  number  of 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  375 

different  occasions,  beginning  at  the  first  sitting,  that  the  manufacturers  in  this 
matter  were  cither  insincere  or  did  not  appreciate  what  they  were  doing.  I  have 
myself,  I  think,  cast  no  doubts  upon  the  sincerity  of  Mr.  Bancroft,  or  the  other 
gentlemen  representing  the  labour  interests,  and  I  do  not  think  there  is  anything 
of  that  kind  called  for  as  far  as  our  Association  is  concerned.  We  are  willing  to 
leave  the  matter,  as  I  said,  absolutely  open,  and  we  want  to  be  credited,  if  it  is 
possible  for  the  gentlemen  opposite  to  credit  us,  with  an  absolute  desire  to  have 
this  matter  adjusted  in  such  a  way  as  to  be  satisfactory,  not  only  to  the  labour 
people,  but  to  the  employing  interests,  and  to  the  public  at  large. 

Mr.  Bancroft:  We  want  you  to  credit  us  with  those  same  sentiments,  and 
there  will  be  no  trouble.  You  said  just  a  little  while  ago  that  there  were  many 
things  we  have  not  thought  of.  Well,  it  is  all  right  if  we  haven't;  but  point  them 
out. 

Mr.  Boyd:  Your  Lordship,  in  regard  to  this  matter  of  opinion  as  to  why  these 
New  England  peoplle  do  not  want  the  employees  to  contribute  to  the  fund,  and  the 
Middle  States  employers  do  want  them  to  contribute  to  the  fund,  quite  a  number 
of  the  attorneys  for^the  employers  give  their  reasons  why  the  New  England  em- 
ployers did  not  want  them  to  contribute,  and  they  base  it  upon  this  reasoning:  that 
if  the  employees  contribute  to  the  fund  then  the  Board  in  making  the  awards  out 
of  a  fund  to  which  the  employees  have  contributed  will  make  a  more  liberal  award, 
and  would  off-set  the  amount  of  his  contribution  by  a  larger  award,  and  when  you 
take  all  the  awards  together  it  would  more  than  make  up  the  amount  he  would 
contribute  to  the  fund,  and  therefore  they  prefer  the  workman  should  not  be  a 
contributor  to  the  fund.  Now,  that  is  advanced  by  attorneys  who  are  paid  to 
guard  the  interests  of  employers. 

Mr.  Wegenast  :  I  am  calling  attention  to  this,  that  in  Germany  during  the 
past  session  of  the  Reichstag,  against  the  strenuous  opposition  of  the  representa- 
tives of  the  labour  interests,  and  on  the  proposal  and  with  the  support  of  the  whole 
employing  interests,  an  amendment  was  brought  in  by  which  the  employers  were 
to  contribute  one  half  of  the  premium  to  the  sickness  fund  instead  of  one  third 
as  they  had  formerly.  The  new  German  Act  now  calls  for  a  contribution  of  one 
half  from  the  employer  and  one  half  from  the!  employee,  and  this,  as  I  say,  was 
the  proposal  of  the  employing  interests,  and  was  bitterly  opposed  to  the  labour 
interests. 

The  Commissioner :     On  what  grounds? 

Mr.  Wegenast:  On  the  ground  that  by  reducing  the  amount  of  contribution 
from  the  Avorkmen  the  workmen  would  be  deprived  to  that  extent  of  the  control 
of  the  fund.  There  had  been  for  some  years,  a  considerable  period  of  years  back, 
an  agitation  against  the  administration  of  the  sickness  fund.  It  had  fallen  into 
the  hands  of  the  socialist  organizations,  which  are  in  Germany,  of  course,  a  large 
political  factor.  It  was  found  that  the  meetings  of  the  Boards  of  the  Sickness 
Insurance  Organizations  were  really  an  avenue  of  a.  socialistic  propaganda,  and  were 
generally  obnoxious  on  that  account  to  the  employing  interests,  and  consequently 
the  demand  was  made,  and  the  measure  was  carried  through,  and  it  is  now  in 
Germany  that  the  contribution  is  in  the  proportion  of  half  and  half. 

The  Commissioner:  It  is  not  difficult  to  understand  the  motives  of  both 
sides,  is  it  ? 

Mr.  Wegenast  :  No.     I  simply  throw  that  out  as  a  suggestion,  with  regard 
to  the  suggestion  here. 

Mr.  Gibbons:     It  wasn't  a  matter  of  generosity  on  the  part  of  the  employers. 


376  MINUTES  OF  EVIDENCE:  No.  65 


Bancroft  :  Ho  wanted  to  get  more  representation  on  the  Board. 

Mb..  Wegenast:  There  is  just  that  feature.     It  was  brought  to  my  mind  by 

tatement  of  Mr.  Boyd  that  in  New  England  the  disposition  was  to  keep  the 

ibutions  of  the  labour  interests  out  of  the  thing  altogether  for  the  sake  of 

having  a  larger  measure  of  control.     Now,  I  do  not  want  to  argue  for  or  against 

The  Commissioner:  That  is  hardly  it.     It  is  thought  the  sympathies  of  the 
Board  that  made  the  awards  would  go  out  in  a  larger  measure  to  them  because 
they  had  contributed.     It  was  rather  that  way. 
Mr.  Boyd:  Yes. 

The  Commissioner:  That  would  not  be  a  judicial  Board,  then. 
Mr.  Boyd:  No,  but  the  Board  is  a  Board,  and  the  Board  is  made  of  men, 
and  men  will  do  what  human  nature  prompts  them  to  do,  whether  they  are  judges, 
or  whaever  they  are.  This  is  based  on  an  experience  of  40  or  50  years.  I 
don'1  say  that  is  my  opinion,  but  I  say  that  it  is  the  opinion  of  these  men  who 
are  paid  $10,000  and  $12,000  and  $15,000  a  year  to  advise  the  employers  as  to 
policy,  and  yet  there  is  that  diametrical  conflict  between  the  Eastern  employers 
and  the  Middle  States  employers.  So  that  the  matter  of  opinion  is  not  grounded 
upon  narrow  mindedness;  it  is  grounded  upon  the  extent  of  their  actual  know- 
ledge as  to  how  things  worked  out. 

Mr.  Wegenast:  My  point,  your  Lordship  is  this,  that  where  the  workman 
contributes  he  will  demand  a  larger  share  in  the  management,  and  a  larger  say 
in  the  disposition  of  the  funds.     Now,  that  is  an  argument  against  me. 

The  Commissioner:  How  can  you  have  that  if  you  have  a  Board  of  three? 
Mr.  Wegenast:  If  he  cannot  have  it  any  other  way  it  will  be  by  raising  his 
voice  in  the  public  press  and  by  making  his  influence  felt  by  deputations  to  the 

"Government  and  such  other  methods  of  propaganda 

Mr.  Gibbons:  He  has  not  money  to  keep  a  man  lobbying  all  the  time. 
Mr.  Ho  yd:  Why,  with  us  the  labour  organizations  are  more  strongly  represented 
■on  the  floor  of  the  legislature  than  the  employers  are.     Over  in  the  State  of  Ohio 
there  is  no  doubt  about  that.     They  have  professional  lobbyists.     For  example,  the 
railway  trainmen  had  W-  J.  Winans,  a  trained  lobbyist;  for  twelve  year-. 
Tin;  Commissioner:  What  does  he  do? 

Mi:.  Boyd:  I  don't  know  everything  he  does;  I  only  know  some  things.     He 
is  there  long  before  the  legislature  opens,  and  he  is  there  when  they  go  out,  and 
;  is  there  during  the  intermissions,  and  lie  is  there  all  the  time  he  isn't  asleep- - 
he  time;  and   he  i-  down  there  on  the  floor  to-day,  around  the  floor  in  some 
capacity,  in  the  Constitutional  Convention:  and  not  only  is  he  there,  hut  there  are 
•~"  representatives  of  (he  locomotive  engineer-  and  firemen,  and  conductors,  and 
forge!   for  a  minute  or  think  they  don't  take  notice  of  what  they  want. 
Mi:.   Bancroft:     That  is  why  I  would  like  to  correct  a  statement:  not  cor- 
!   i'.  hni  j  Per  another  statement.     Mr.  Wegenasi  said  he  thought  if  legis- 

is  kind  ed  that   the  workmen  would  blame  the  employers.    We 

been  connected  with  legislation  for  years,  on  deputations,  and  so  forth,  and 
I    assure  you   they  will    not   do  anything  of  the  kind.       The  workers  know  what 
Ration  is  in  this  day.  and  they  will  blame  the  State.     They  won't  blame  the 
employere  Poi  thing  they  could   not   prevent.  , 

Mi;.  Wegenast:  I  am  ready  righl  now,  if  yon  desire  it,  to  go  into  the  whole 
"ii  of  i  ontribution. 
I'm;  Commissioner:  If  von  are  ready  I  will  be  glad  to  hear  von. 


1912  WORKMEN'S  COMPENSATION   commission.  :;;; 

Mi;.  Wr.ciKXAST:  I  do  not  want  to  take  any  more  time  than  your  Lordship  is 
prepared  to  give.     I  wanted  to  go  into  a  number  of  the  items  which  come  under 

the  different  principles.  Some  of  them  are  so  obvious  that  no  supporting  argu- 
ment is  necessary,  but  a  number  I  will  give  some  authorities  on.  I  will  read  a 
paragraph  or  two  out  of  my  brief: — 

'" 'I'lir  only  phase  of  the  subject  of  workmen's  compensation  upon  which  any 
considerable  diiference  of  opinion  exists  is  that  of  contribution  by  the  workman 
to  the  cost  of  the  insurance.  So  long  as  compensation  was  a  matter  of  recovery 
of  damages  for  fault,  direct  or  indirect,  on  the  part  of  the  employer,  there  was  no 
logical  reason  for  contribution,  but  the  modern  systems  of  compensation  in  which 
all  cases  are  covered  practically  regardless  of  fault,  raise  the  question  whether  the 
workmen  should  not  contribute  out  of  his  wages  a  proportion  of  the  insurance  pre- 
mium representing  the  proportion  of  accidents  due  to  the  fault  of  the  workman. 

"The  diiference  of  opinion  amongst  expert  authorities  may  be  attributed  very 
largely  to  the  strenuous  opposition  of  the  rank  and  file  of  the  labour  interests  to 
any  deduction  of  wages.  Some  of  the  wrriters  and  authorities  upon  the  subject 
have  been  or  are  official  representatives  of  labour  organizations,  and  are  naturally 
influenced  by  the  general  attitude  of  these  bodies.  Other  investigators  who  are  not 
directly  subject  to  this  influence  are  nevertheless  actuated  by  a  spirit  of  compro- 
mise to  the  hostility  of  labour  organizations  and  by  the  notion  that  any  economic 
injustice  will  find  ifs  adjustment  in  the  amount  of  wages." 

Now,  your  Lordship  can  appreciate  the  temptation  to  me  in  my  position.  We 
are  practically  agreed  with  the  labour  interests  on  every  point  but  this.  Your 
lordship  can  appreciate  the  temptation  to  say,  "Oh  well,  have  it  your  own  way."' 
or  something  of  that  kind.  It  means  really  less  to  us  than  the  labour  inter.  -  - 
after  all.  but  as  I  said  before  I  could  not  conscientiously  give  way  on  this  point. 
I  am  willing,  as  I  said,  to  simply  lay  the  principle  with  the  arguments  before  your 
Lordship,  and  before  the  labour  people,  and  let  it  rest  there.  But  I  would  not  be 
doing  my  duty  by  letting  the  matter  go  by  default.  I  adhere  to  the  idea  that  I  am 
expressing  here,  that  no  system  will  be  found  permanently  satisfactory  in  which 
the  workmen  has  not  a  direct  pecuniary  interest  so  far  as  reducing  the  number  of 
accidents  is  concerned. 

Mr.  Gibbons:     Might  I  ask  Mr.  Wegenast  a  question  or  two  on  that? 

Mr.  Wegenast:     Yes. 

Mr.  Gibbons:  Now.  one  of  the  reasons  for  a  new  act  was  to  gei   away  fr 
litigation. 

Me.  Wegenast:     I  am  coming  right  to  that  point  in  the  next  few  sentem 

Mr.  Gibbons:     Then  here  you  put  in  this  "contributory  negligence"  clause, 
or  "gross  carelessness."     Now,  it  would  be  necessary  to  prove  to  that  Commiss 
that  there  was  no  gross  carelessness,  or  that  there  was. 

Mr.  Wegenast:     But  I  haven't  that  in. 

I  have  had  some  conversation  with  the  labour  interests  and  I  have  found  what 
appeared  to  me  an  amazing  amount  of  difficulty  in  convincing  them  that  when  T 
say  in  my  brief  that  it  is  proposed  to  compensate  the  workmen  for  all  accidents — 

Me.  Gibbons:     With  his  own  money. 

Mr.  Wegenast:  And  then  go  on  to  say  there  should  be  some  penalty  for  mis- 
conduct, that  I  mean  exactly  whatl  say.  Tt  seems  an  absolutely  ineradicable  idea  in 
the  minds  of  the  representative-  of  the  labour  interests  that  there  is  some  trap.  I 
am  not  wedded  to  any  form  of  words  in  the  plan  which  I  have  enunciated.  T 
simply  say  there  must  he  some  principle  somewhere — in  the  Criminal  Code,  if  you 
like, — which  will  bring  home  to  the  workman  the  responsibility  for  his  misconduct. 


378  MINUTES  OF  EVIDENCE:  No.  65 

— _ , 

Me.  Gibbons:  Just  get  that  trap  out  of  your  head  for  a  while.  Section  2 
of  your  statement  of  principles  says  that  gross  carelessness,  drunkenness,  and  so 
on,  should  be  penalized  in  some  way.  Very  good.  We  come  down  to  section  7, 
I  think  it  is,  and  you  have  stated  there  that  the  workman  should  pay  a  contribution 
equal  to  the  amount  of  the  compensation  that  is  caused  by  his  carelessness,  or  gross 
carelessness,  whichever  you  like.  One  of  your  representatives  this  afternoon  stated 
that  only  forty  per  cent,  or  forty-one  per  cent,  of  the  accidents  were  due  to  the 
employers,  leaving  fifty-one  per  cent,  to  the  credit  of  the  employees.  Now,  if  the 
employee  has  to  pay  fifty-one  per  cent,  of  the  contribution  to  this  fund  I  think  he  is 
a  great  deal  more  interested  in  it  than  the  manufacturer.  That  is  your  statement 
now,  that  he  should  pay  an  amount  equal  to  what  is  charged  up  to  his  carelessness, 
and  it  was  stated  to-day  that  fifty-nine  per  cent,  was  his  carelessness. 

Mr.  Wegenast  :  I  am  coming  to  that.  Because  in  the  Canadian  General 
Electric  Company  there  is  that  ratio  of  fault  'it  does  not  follow  that  the  same 
ratio  exists  in  other  industries. 

Mr.  Gibbons  :  Let  me  point  out  there  why  that  ratio  does  exist  in  the  Can- 
adian General  Electric.  If  you  go  down  to  their  plant  you  will  find  they  employ 
a  large  percentage  of  foreigners  and  they  don't  understand  our  language  at  all. 
They  don't  understand  practically  the  instructions  that  are  given,  and  they  go  into 
danger  that  they  don't  know  is  danger,  and  nobody  can  tell  them  because  they  don't 
understand  our  language,  and  they  are  killed  by  large  beams  falling  on  them,  and 
one  thing  and  another.  They  can't  get  any  instructions  about  that  kind  of  thing, 
because  they  don't  understand  the  language. 

Mr.  Wegenast  :  I  am  not  attempting  to  say  what  the  proportion  should  be. 
I  have  statistics  showing  in  a  general  way.  We  have  Mr.  Boyd's  statistics,  and  I 
think  I  have  them  right  here  to  show  a  proportion  of  about  twenty-eight  per  cent, 
of  fault  on  the  part  of  the  workmen. 

Mr.  Boyd  :     That  is  correct. 

The  Commissioner  :  Does  that  mean  due  wholly  to  the  fault  of  the  workmen  ? 
Or  due  partly  to  the  fault  of  both? 

Mr.  Boyd:  Wholly  to  the  negligence  of  the  workmen.  You  will  find  that 
carefully  stated  in  the  brief  I  presented  at  page  27. 

Mr.  Gibbons  :  Now,  we  had  a  striking  instance  of  that  recently  in  that  car 
accident  at  the  St.  Lawrence  street  switch.  It  was  heralded  abroad  that  the 
motorman  had  done  so  and  so,  and  it  was  all  his  negligence.  Now,  that  has  been 
thoroughly  investigated  at  over  five  sittings  of  a  Board,  and  they  found  no  fault 
with  him  at  all.  They  do  not  even  mention  in  their  finding  that  he  was  negligent. 
These  statistics  are  gathered  possibly  without  a  trial  as  to  whether  the  worker 
was  negligent  or  not. 

Mr.  Boyd:     Oh,  no. 

Mr.  Wegenast:  These  statistics  in  the  State  of  Ohio  and  in  the  State  of 
Illinois  are  not  gathered;  at  haphazard.  They  were  gathered  by  a  Commission  con- 
sisting of  representatives  of  labour  interests,  or  given  under  their  sanction.  At  all 
events  the  statistics  of  Germany  are  on  a  basis  of  simply  entering  a  claim 
without  any  action  whatever. 

Mr.  Boyd:     The  Boards  there  all  have  representatives  of  labour. 

Mi;.  Gibbons:  It  may  be  duo  to  the  employee  not  observing  rules  laid  down 
by  the  companies.  Now,  let  mo  point  out  to  you  here,  as  I  did  before,— We  will 
take  a  piece  of  road  over  which  a  train  is  running,  or  a  street  car  is  running,  and 
yon  will  find  at  the  car  barns  they  are  not  to  run  more  than  four  miles  an  hour, 
and  at  another  point,  "  all  cars  must  stop  hero,"  and  another  one  that  "  the  motor- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  379 

man  must  shut  off  his  power  and  have  his  car  under  control  at  each  crossing/'  and 
"  must  go  slow  past  cars."  Then  you  go  to  the  schedule  and  you  find  he  has 
twenty-four  minutes  to  go  from  the  Union  Station  to  North  Toronto,  and  if  he 
observed  those  rules  he  could  not  do  it  in  35  minutes,  and  if  he  does  not  observe 
one  of  them  then  he  is  guilty  of  negligence. 

Mr.  Wegenast  :  I  am  not  speaking  of  the  correctness  of  anybody's  statistics, 
but  we  know  the  labour  men  say  a  very  small  number  are  due  to  the  fault  of  the 
workmen.  Let  it  be  a  small  number,  but  a  certain  number  of  accidents  are  due  to 
the  fault  of  the  workmen,  and  the  general  principle  that  I  am  enunciating  is  that 
a  proportion,  representing  somewhere  near  the  number  of  accidents  which  are  due 
to  the  fault  of  the  workmen,  should  be  paid  by  the  workmen. 

Mr.  Doggett:  I  would  like  to  ask  one  question  on  this  matter  as  far  as  it 
has  gone.  Do  you  think  if  the  men  did  contribute  the  ten  per  cent,  to  the  State 
insurance  that  that  would  stop  them  and  make  them  look  around  and  see  that 
everything  was  safe  on  buildings,  or  in  the  industries  where  they  were  working,  or 
do  you  think  they  would  safeguard  themselves  on  account  of  the  pain  and  suffering 
they  must  endure  afterwards?  Don't  you  think  the  speeding-up  system  does  not 
allow  much  time,  or  the  Unions  to  save  much?  We  have  accident  insurance  at  the 
present  time.  I  do  not  think  my  experience  has  shown  me  that  a  workman  on  a 
building  is  thinking  about  saving  the  Union's  money  if  there  is  going  to  be  an 
accident.  I  have  found  he  is  looking  at  the  subject  in  the  light  of  his  pain  and 
suffering  and  I  think  mvself  the  fame  thing  would  occur  with  the  State  insurance; 
they  would  not  be  thinking  so  much  about  saving  the  State  insurance,  or  the  money 
gathered  by  the  State  for  insurance  and  their  ten  per  cent,  contribution,  as  they 
would  be  of  the  pain  and  suffering. 

Mr.  Wegenast:     I  will  come  to  that  presently.' 

"  As  the  question  of  contribution  is  the  only  feature  of  the  subject  upon  which 
the  interests  of  employers  and  workmen  seriously  diverge,  it  is  only  natural  that 
this  spirit  of  compromise  has  found  expression  in  some  of  the  established  systems. 
But  notwithtanding  the  disposition  of  workmen  to  avoid  the  burden,  the  principle 
of  joint  contribution  has  been  recognized  and  embodied  in  a  majority  of  the 
systems." 

Then  I  have  a  foot  note  referring  particularly  to  a  number  of  them.  This  is 
all  in  my  brief. 

I  may  say,  by  the  way,  that  I  do  not  propose  to  fight  this  to  the  bitter  finish 
with  Mr.  Bancroft.  The  facts  are  what  they  are,  no  matter  what  they  are.  I  hope 
Mr.  Bancroft  will  let  me  say  what  I  want  to  say,  and  leave  the  issue  as  an  issue  of 
fact. 

"  The  contributory  principle  is  recognized  in  the  following  European 
countries:  Norway,  four  weeks  waiting  period;  Sweden,  sixty  days  waiting  period; 
Denmark,  thirteen  weeks  waiting  period;  Holland,  about  thirteen  weeks  waiting 
period;  Germany,  about  thirteen  weeks  waiting  period;  Austria,  about  four  weeks 
waiting  period;  and  also  about  ten  per  cent,  of  premiums;  in  Switzerland,  twenty- 
five  per  cent,  of  the  premiums  after  certain  deductions  have  been  made." 

The  application  of  the  contributory  principle  in  Europe  is  also  shown  in  the 
figures  on  page  14  of  Schwedtman  and  Emery's  book.  They  divide  the  countries 
of  Europe  into  two  classes. 

The  Commissioner:  I  think  the  difficulty  between  you  and  Mr.  Bancroft 
is  fanciful  rather  than  real.  He  points  to  this  schedule  which  shows  what  you  state, 
that  in  Norway  it  is  fifty  per  cent,  of  the  yearly  wage,  dating  from  the  fifth  week 
after  the  accident.     Of  course  there  is  no  direct  contribution  by  the  employee,  and 


380  MINUTES  OF  EVIDENCE:  No.  65 

all  that  Mr.  Wegenast  is  arguing  for  is  that  by  means  ;of  that  five  weeks  waiting 
period  he  does  indirectly  contribute  to  the  funds. 

Mr.  Bancroft:  The  contributions  are  for  sick  insurance,  and  we  are  not 
dealing  with,  sick  insurance.     We  are  dealing  with  industrial  accidents. 

The  Commissioner:  Now.  take  Norway.  It  says  the  contributions  yearly 
are  by  the  employers  alone.  That  is  the  direct  contribution.  Then  the  benefits  are 
free  medical  treatment  and  'pension  up  to  sixty  per  cent,  of  the  yearly  wage,  or  free 
hospital  treatment  and  relief  to  family  up  to  fifty  per  cent,  of  the  yearly  wage, 
from  the  fifth  week  after  the  accident.  Mr.  Wegenast's  point  is  that  if  under 
the  proposed  act  you  only  give  a  waiting  time  of  a  week,  that  that  four  weeks  in 
Norway  is  'practically  a  contribution  to  that  extent  to  the  funds  by  the  workmen. 

Mr.  Bancroft  :  In  all  cases  where  there  is  a  waiting  period  you  will  find 
there  is  sick  insurance  legislation  connected  with  it. 

The  Commissioner:  That  is  right  enough,  but  Mr.  Boyd  made  that  very 
clear  that  while  that 'is  so  it  covers  the  accident  as  well. 

Mr.  Boyd  :     That  is  physical  accident,  injury  to  the  body. 

The  Commissioner:  So  that  as  far  as  it 'covers  physical  accidents  it  is  taken 
from  the  workmen. 

Mr.  Bancroft:  In 'none  of  those  cases  is  there  such  a  proposition  as  the 
employers  have  made,  for  a  direct  contribution  to  the  funds. 

Mr.  Boyd  :     Yes,  there  is  in  France. ' 

The  Commissioner:  If  the  manufacturers  propose  there  should  be  a  five 
weeks'  wait  and  no  contribution  it  would  be 'like  Norway,  would  it  not? 

Mr.  Bancroft:     No,  because  there  is  no  sick  insurance. 

The  Commissioner:  Still  for  an  accident  there  is  no  payment.  Supposing 
he  is  not  sick  at  all  excepting  the  accident,  during  five  weeks  of  that  time  he  gets 
nothing  and  he  has  to  support  himself,  but  if  you  give  him  four  weeks  of  com- 
pensation then  surely  you  /put  him  in  a  better  position  than  the  Norway  man  by 
that  four  weeks? 

Mr.  Wegenast:  I  do  not  want  to  quibble  over  all  this,  your  Lordship.  This 
is  the  Bulletin  of  the  Labour  Bureau  of  the  United  States,  and  I  think  there  is  a 
column  here  showing  there  is  only  one  State  in  the  Union — Oh  no,  there  are  a 
number  of  other  systems — one  I  think  in  Montana,  where  the  coal  miners 
contribute. 

The  Commissioner:     The  question  is.  what  is  right  to  be  done? 

Mr?.  Wegenast:  In  Maryland  there  is  a  contribution  and  in  Ohio,  and  I 
think  one  other.     There  is  an  analysis  of  all  the  acts  in  the  United  States. 

Mr.  Bancroft:  They  contribute  as  a  Compensation  Act  without  any  other 
insurance?     In  Great  Britain,  we  have  no  other  insurance. 

The  Commissioner  :  It  would  be  wholly  inconsistent ;  the  employer  pays 
there. 

Mr.  Boyd:     That  is  not  an  insurance  proposition. 

Mr.  Wegenast:  The  original  intention  in  introducing  the  British  Act 
was  that  workmen  should  contribute  to  the  compensation  for  injuries  by  them- 
selves bearing  the  burden  for  the  first  three  weeks.  Mr.  Joseph  Chamberlain 
stated  in  introducing  the  Act  of  1897  that  the  only  ground  which  justified  the 
proposal  of  the  Government  io  make  provisions  for  work  injuries  was  the  fact 
that  there  was  a  huge  number  of  injuries  that  might  he  presumed  Io  incapacitate 
I  he  workman  more  than  three  weeks,  and  said:  "If  it  could  be  presumed  that 
all  work  injuries  would  last  three  weeks  or  Less,   I  can  see  no  reason  for  the  in- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  381 

— , 

terference  of  the  Government,  because  those  are  injuries  for  which  the  workman 
might  be  expected  to  provide  against  himself." 

My  proposition  is  as  long  as  the  workman  is  supposed  to  provide  something 
for  himself,  his  clothes  or  his  food,  his  sell'  respeci  should  deter  him  from  asking 
the  employer  to  pay  for  something  which  is  due  to  his  own  fault.  The  whole  matter 
is  discussed  at  large  in  the  report  of  the  Conference  of  Commissions  at  Chicago  to 
which  Mr.  Boyd  has  already  made  reference,  and  here  is  a  paragraph  from  Mr. 
Smith  of  the  Ohio  .Commission.  "  The  next  reason  why  he  should  be  a  party 
to  this  compensation  fund  is  that  I  have  learned  between  fifteen  and  twenty  per 
cent,  of  the  personal  injuries  have  any  cause  for  action  in  the  court-." 

Mr.  Boyd:     He  means  he  does  not  have  a  cause  of  action. 

Me.  Wegenast:  He  would  not  have  a  cause  of  action  in  the  courts  on  the 
ground  of  fault  of  the  employee,  and  acts  of  God,  being  inherent  causes  of  the 
accident. 

"  It  is  the  eighty  per  cent.,  then,  gentlemen,  that  we  have  to  consider.  We  are 
going  to  make  a  law  to  take  care  of  the  eighty  per  cent.,  and  the  greatest  number 
should  always  be  considered.  That  is  my  belief.  Now.  that  being  the  case,  that  we 
are  going  to  compensate  those  that  have  no  right  for  compensation.  I  feel  that 
the  American  workman  is  honest,  the  American  workman  is  fair,  and  the  American 
workman  is  not  a  charitable  party,  nor  does  he  require  or  ask  any  charity  from 
you  or  from  me,  and  he  is  always  willing  to  pay  his  part  and  to  do  his  duty.  But 
the  arguments  will  be  brought  "forward  by  some  workingmen  that  the  industry 
should  pay  it  all,  and  then  we  come  down  to  the  industry.  What  is  the  industry? 
The  industry,  as  we  look  at  it,  or  I  look  at  it,  is  something  that  is  there  where  the 
employer  derives  an  income  from  and'  where  the  employee  derives  an  income  from. 
Therefore,  he  is  a  part  of  the  industry.  When  you  come  down  to  saying  that,  that 
the  industry  should  stand  it  all,  he  is  a  part  of  the  industry." 

The  Commissioner  :  I  suppose  the  strongest  argument  for  it  is,  if  it  is 
morally  right  for  the  workman  not  to  be  compensated  for  injuries  due  to  his  own 
negligence,  you  buy  insurance  for  him  against  that,  and  is  it  right  or  not  right 
that  lie  should  pay  something  for  that  insurance?  That  is  the  business  proposition 
as  it  strikes  me.  I  would  not  put  it  upon  the  ground  of  making  him  more  care- 
ful. I  think  there  is  a  great  deal  in  what  Mr.  Doggett  says,  that  the  fact  of  him 
contributing  a  few  cents  would  not  make  much  difference. 

Mr.  Wegenast:  The  fact  of  his  irritation  at  the  contribution  would  con- 
stantly keep  his  attention  upon  the  necessity  of  being  careful.  I  am  not  speaking 
of  the  workman  in  an  individual  capacity,  because  I  believe  that  in  the  matter  of 
accident  preventio  it  is  necessary  to  have  not  only  the  individual  interest  of  the 
employer,  but  the  collective  interest  of  the  employer  enlisted — the  collective  effort? 
of  the  employer;  and  on  the  other  hand  it  is  necessary  to  have  not  only  the 
individual  interests  of  the  workmen,  and  his  pain  and  suffering,  but  the  collective 
interests  of  the  workmen.  What  I  would  like  to  see  is  on  the  agenda  of  the  meetings 
of  the  labour  unions  and  their  conventions  the  subject  of  accident  prevention. 
I  cannot  for  the  moment  see  any  better  way.  or  any  more  forcible  way  of  getting 
it  on  the  agenda  and  enlisting  the  interest  of  the  workmen  collectively  than  by 
keeping  up  this  very  irritation. 

The  Commissioner  :     Do  you  think  a  law  that  causes  irritation  is  a  good  law  ? 

Mr.  Wegenast  :  It  is  not  per  se  a  good  law.  I  do  not  think  it  is  necessary 
there  should  be  a  great  deal  of  irritation,  but  as  I  stated  before,  if  a  clause  were 
introduced  in  an  insurance  act  enabling  the  employer  to  say  to  the  workmen,  if 
von  are  not  careful,  or  if  you  take  off  those  guards— or  enable  only  the  foreman  to  say 


382  MINUTES  OF  EVIDENCE:  No.  65 

1 

to  his  men,  if  you  don't  leave  those  guards  on  the  machine,  or  if  you  do  this,  that, 
or  the  other  thing,  this  rule  will  be  enforced  against  you  and  you  will  have  your 
wages  reduced  next  month,  I  think  there  must  be  a  direct  deterring  influence. 

The  Commissioner:  What  would  you  think  of  a  provision  by  which  this 
Board  would  have  power  to  take  something  off  the  compensation  that  the  workman 
would  otherwise  be  entitled  to  if  the  accident  was  caused  by  his  fault? 

Mr.  Wegenast  :  I  do  not  like  that  so  well.  I  am  going  into  that  later.  There 
are  other  methods  of  contribution  none  of  which  are  so  satisfactory. 

"  The  German  system  has  steadily  adhered  to  the  principle  of  a  long  '  waiting 
period,'  thirteen  weeks.  In  other  systems  the  workman  pays  directly  a  portion 
of  the  insurance  premium  by  way  of  deducting  from  his  wages,  and  the  latest  and 
one  of  the  most  carefully  considered  acts  in  the  United  States,  namely,  that  of 
Ohio,  recognizes  the  contributory  principle  by  authorizing  the  employer  to  deduct 
ten  per  cent,  of  the  insurance  premium  from  the  wages  of  the  workman." 

I  think  the  representatives  of  the  workmen  here  will  not  contradict  me  when 
I  say  that  the  Ohio  Act  is  certainly  an  advanced  type  of  act. 

The  Commissioner:     If  that  was  eliminated  it  would  be  perfect,  I  suppose. 

Mr.  Wegenast  :  It  must  be  a  grave  fault  if  we  believe  what  the  labour  people 
would  have  us  believe. 

Mr.  Boyd:  They  were  not  kicking  before  the  Supreme  Court.  They  were 
there  with  all  the  money  that  the  attorney  demanded  to  defend  that  act,  and  not 
only  that  but  they  printed  thousands  of  copies  of  his  brief  and  sent  them  all  over 
the  State  of  Ohio,  showing  his  argument  for  sustaining  that  act,  with  that  con- 
tribution in  it. 

The  Commissioner:  Does  it  not  mean  they  would  rather  have  it  with  that 
flaw  in  it  than  not  at  all? 

Mr.  Gibbons:  Mr.  Wegenast  has  stated  that  one  of  the  intentions  of  this 
was  to  cause  irritation,  and  now  they  must  come  around  and  tell  us  that  the  work- 
men are  in  favour  of  it.     It  -can't  work  both  ways  . 

Mr.  Wegenast:  There  may  be  an  occasional  workman  who  is  so  far  seeing 
as  to  appreciate  what  would  be  the  probable  operation  of  an  act  of  this  kind. 

I  thought  when  your  Lordship  started  to  speak  a  moment  ago  you  proposed 
to  refer  to  a  possible  power  being  vested  in  the  Board  to  sanction  the  use  of  this 
contributory  section.  It  might  be  further  safeguarded  so  that  the  workmen 
would  have  power  to  impose  the  contribution  only  on  consent  of  the  Board.  I  do 
not  mind  how  you  do  it  as  long  as  it  is  a  reasonable  amount. 

The  Commissioner:  That  would  shift  the  odium  from  the  employer  to  the 
Board  ? 

Mr.  Wegenast:  It  might  result,  and  I  think  it  would,  in  very  few  impo- 
sitions being  made,  but  the  power  would  be  there  and  the  principle  would  be  there, 
and  theworkme  n  would  have  his  pecuniary  interest  enlisted  by  the  mere  possibility. 
After  all  the  individual  employer  would  be  very  likely  to  say  to  the  workmen, 
"  Now,  I  am  going  to  pay  your  wages;  I  have  the  right  of  course  to  take  this  insur- 
ance premium,  but  I  am  not  doing  that  with  my  workmen."  It  is  probable  a 
large  percentage  of  employers  would  do  that.  I  should  think  nine  out  of  ten  would 
do  that.  Tt  would  work  out  as  a  matter  of  adjustment  of  wages,  but  the  power 
would  be  there. 

Mr.  Bancroft:  Mr.  Wegenast,  didn't  the  gentleman  who  represented  the 
Ocean  Accident  here  state  that  they  only  issued  the  policy  that  he  asked  for,  and 
as  a  rule  he  did  not  ask  for  anything  only  his  legal  liability  to  be  covered,  and  as  far 
as  humanitarian  principles  were  concerned  he  had  nothing  to  do  with  it?     Didn't 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  383 

be  say  that?     Then  why  should  we  assume  that  the  employer  would  do  these  things 
if  it  is  not  in  the  legislation  ?     He  only  does  what  he  has  to  do,  like  everyone  else. 
Mk.  Wegenast:     Well,  the  law  is  not  made  for  the  righteous  man,  and  I  have 
not  anywhere  suggested  that  the  employers  are  all  of  that  class. 

"  There  is  of  course  no  question  that  a  very  large  numher  of  accidents  are 
attributable  to  neither  the  fault  of  the  employer  or  the  intrinsic  hazard  of  the 
injury.  The  only  question  that  can  arise  is  as  to  the  relative  proportions.  The 
17  1-3  per  cent.;  workers'  fault,  29  2-3  per  cent.;  employers'  and  workers'  fault, 
1U  per  cent. ;  hazard  of  industry,  43  per  cent." 

The  Commissioner:     How  are  those  figures  arrived  at?     Are  they  arrived 
at  as  Mr.  Watts  arrived  at  his  figures? 

Mb.  Wegenast  :     These  are  from  the  reports  of  the  Boards  of  Award. 
Mr.  Boyd:     As  I  said  in  my  opening  remarks  they  cover  millions  of  accidents. . 
where  they  are  analysed  and  tabulated.       For  example,  the  German  Industrial 
Insurance  Act  is  administered  by  a  Commission  and  they  publish  every  year  an 
annual  report  of  the  statistical  operations  of  the  Act,  covering  every  feature. 

The  Commissioner:  What  is  the  object  of  continuing  that  inquiry  when  it 
does  not  make  any  difference? 

Mr.  Boyd  :  As  I  pointed  out  in  my  opening  remarks  they  gather  and  keep 
these  statistics  for  the  purpose  of  seeing  in  what  way  they  can  reduce  the  number  of 
accidents  due  to  the  fault  of  the  employer,  the  number  of  accidents  due  to  the  fault 
of  the  employee,  the  number  of  accidents  due  to  the  combined  fault  of  the  employers 
and  employees,  and  to  reduce  the  element  of  fault  in  the  natural  hazard  of  the 
business. 

Mr.  Wegenast  :     They  have  most  elaborate  statistics  on  all  these  subjects. 
The  Commissioner  :     You  say  these  are  compiled  from  the  papers  in  con- 
nection with  the  claims  that  are  made  upon  the  fund  ? 

Mr.  Boyd  :  My  statistics  are  taken  from  the  annual  report,  a  volume  of  about 
500  pages,  and  the  investigation  of  each  individual  case. 

The  Commissioner:     That  ought  to  be  fairly  accurate. 
Mr.  Boyd  :     Those  figures  are  not  put  down  until  the  Commission  agrees  upon 
them,  and  that  is  about  evenly  composed  of  employers  and  employees. 

Mr.  Bancroft  :  In  accident  insurance  I  am  told  the  ones  who  administer  it 
are  the  mutual  trade  associations  of  Germany,  composed  entirely  of  employers,  and 
they  are  the  ones  who  gather  all  those  figures. 

Mr.  Boyd  :  No.  For  example  every  accident  to  the  body  is  carried  in  the 
sick  insurance  if  it  lasts  not  more  than  thirteen  weeks,  every  single  accident.  Every 
one  of  those  accidents  is  first  reported  under  the  sick  insurance. 
The  Commissioner:  And  labour  is  represented  on  that, 
Mr.  Wegenast:  Then  I  have  another  set  of  statistics.  In  Mr.  Boyd's  brief 
in  the  Federal  Commission,  on  page  "  732  "  of  ;the  Report  of  the  Federal  Com- 
mission, there  is  another  set  of  statistics  for  the  years  1887.  1897  and  1907.  at 
intervals  of  ten  years. 

Mr.  Boyd  :  That  covers  the  entire  operation  of  the  act  over  twenty  years. 
Mr.  Wegenast:  In  1887  the  number  of  accidents  due  to  the  employee  was 
26.56;  in  1897  it  was  29.74  and  in  1907  it  was  28.89.  Those  figures  agree  prac- 
tically with  the  figures  given  by  Mr.  Boyd.  The  following  figures  are  given  by  the 
Illinois  Commission,  and  they  are  very  surprising.  The  Illinois  Commission  have 
been  quite  frank  and  say  they  have  got  them  from  the  Reports  of  the  Appellate 
Courts.  In  the  Supreme  Court  the  employer's  negligence  is  attributed  in  twentv 
cases :  employee's  negligence,  four  cases ;  other  causes,  four  cases. 


obi  MINUTES  OF  EVIDENCE:  No.  65 

The  Commissioner:  Those  would  be  very  defective  statistics,  because  it 
would  only  apply  to  cases  going  to  court. 

Me.  Wegenast:  The  proportion  must  be  somewhere  in  the  neighbourhood  of 
between  25  and  30  per  cent.  These  figures  are  all  in  the  brief  which  I  have 
submitted. 

"  The  principal  reason  for  covering  all  accidents  regardless  of  questions  of 
fault,  is  that  the  expense  of  determination  of  these  questions  in  specific  cases  is 
eliminated." 

If  any  Workmen's  Compensation  Act  were  to  be  placed  upton  the  correct  moral 
basis,  a  basis  of  natural  justice,  it  would  mean  the  employer  would  bear  only  com- 
pensation for  those  accidents  which  were  due  to  his  fault  and  due  to  the  intrinsic 
fault  of  the  industry,  or  due  to  the  acts  of  God.  There  can  be  no  justice  in  charg- 
ing the  employer  with  those  accidents  which  are  due  to  the  employee's  fault. 

Mr.  Doggett  :  I  would  like  to  say  one  word.  It  has  been  mentioned  here 
that  we  should  educate  and  use  a  propaganda  in  respect  to  educating  men  along 
the  lines  of  being  careful.  Now,  it  is  only  about  twelve  months  ago  when  I  was 
on  a  committee,  that  was  appointed  by  the  Ontario  legislature,  to  advocate  tile 
enforcement  of  a  Scaffolding  Bill  for  this  Province. ,  I  might  state  that  a  resolution 
was  sent  on  from  the  Trades  and  Labour  Congress  of  Canada,  and  we  duly  laid  our 
views  before  the  committee  that  was  appointed  by  the  Ontario  legislature,  after 
Sir  James,  the  Premier,  and  his  Cabinet,  had  seen  fit  that  something  should 
be  done  along  those  lines.  I  might  state  that  quite  a  few  employers  opposed 
that  Scaffold  Bill  that  we  have  now  in  force.  That  was  for  the  prevention  of 
accidents  and  for  the  safety  of  the  workmen  on  the  building,  and  the  employers 
came  there  and  opposed  it,  some  on  the  grounds  that  it  might  cost  a  few  cents  more 
to  put  supports  on. 

Mr.  Wegenast  :  I  can  show  you  hundreds  of  answers  to  the  circulars  we  sent 
out  in  which  employers  are  opposed  to  any  change  in  the  law  for  workmen's  com- 
pensation. I  cannot  answer  for  the  sins  and  shortcomings  of  the  members  of  my 
own  organization,  let  alone  the  employers  of  Toronto  outside  of  our  Association. 
With  the  large  number  represented  by  our  Association  it  is  hardly  to  be  expected 
that  there  would  not  be  an  occasional  one  who  falls  a  little  below  the  general 
standard. 

Mr.  Bancroft:  I  suppose  what  Mr.  Doggett  thought  was  that  while  it  might 
be  advisable  to  discuss  those  things  in  his  organization,  it  might  not  be  inadvisable 
to  take  them  up  in  yours. 

Mr.  Wegenast:     No  doubt  we  would  have  to  bear  the  lion's  share. 

What  I  said  was  the  principal  reason  for  covering  all  these  accidents  was  that 
the  expense  of  determination  of  questions  of  fault  in  specific  cases  would  be 
eliminated.  If  25  per  cent,  of  the  accidents  were  due  to  the  fault  of  the  workmen 
it  might  take,  and  doubtless  would  take,  as  much,  or  almost  as  much,  to  weed  out 
the  bad  cases  as  it  would  to  compensate  them.  That  is  the  point  I  am  trying  to 
make. 

"  But  to  throw  the  entire  cost  of  insurance  upon  the  employer  not  only  shocks 
the  sense  of  justice  but  places  the  workman  in  a  humiliating  position.  It  is  no 
doubt  true  that  on  its  economic  side  any  money  contribution  on  the  part  of  the 
workman  could  be  worked  out  as  a  matter  of  adjustment  of  wages.  It  may  he 
observed,  by  the  way  also,  thai  this  is  true  in  a  sense  converse  to  that  in  the  argu- 
ment against  contribution,  for  if  the  workman's  contribution  were  inequitably 
large  it  would  result  in  an  increase  of  wages." 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  385 

That  was  already  touched  upon  by  Mi-.  Boyd,  only,  as  Mr.  Boyd  pointed  out,  it 
would  take  three  or  four  years  to  work  it  out,  by  means  of  strikes,  I  suppose. 

''There  is.  however,  a  point  at  which  the  self-respect  of  the  workman  becomes 
involved.  Even  the  most  advanced  form  of  socialism  would  not  seek  to  free  the 
workman  from  all  sense  of  responsibility  for  bis  own  action,  or  to  throw  upon  tbe 
employer  or  tbe  community  at  large  tbe  responsibility  of  making  provision  for  his 
every  want.'' 

The  Commissioner:  You  are  arguing  without  your  host.  We  have  bad 
strong  arguments  for  that. 

Mr.   Wegenast:   I   don't  quite  appreciate  that? 

The  Commissioner:  We  have  had  strong  arguments  here  for  making  some- 
body pay  for  them,  although  it  is  tbe  workman's  fault. 

Mr.  Wegenast  :     I  do  not  agree  with  that. 

The  Commissioner  :     I  am  saying  we  have  heard  arguments  here. 

Mr.  Wegenast  :     Yes. 

The  Commissioner  :  I  didn't  like  to  say  so,  but  that  is  rather  reflecting 
upon  those  who  have  urged  those  arguments,  to  say  that  no  self-respecting  man 
would. 

Mr.  Wegenast:  It  is  so  intended.  It  was  put  in  this  way,  I  forgot  by 
whom,  but  in  one  of  the  text-books,  in  the  case  of  an  accident  in  a  molding  shop, 
where  the  question  was  as  to  whose  fault  it  was.  The  man,  I  believe,  stumbled  and 
spilled  some  molten  iron,  and  it  was  found  he  had  stumbled  on  tbe  ravelled  edge 
of  his  overalls.  The  obvious  answer  of  the  labour  interests  was  that  the  employer 
should  give  him  better  overalls.     Well,  if  overalls,  why  not  underclothes? 

Mr.  Bancroft:     Do  you  say  that  was  tbe  answer  of  labour? 

Mr.  Wegenast  :  My  argument  is  this,  that  so  long  as  it  is  recognized  that 
each  workman  is  expected  to  provide  something  out  of  bis  wages,  there  must  be  a 
point  at  which  tbe  obligation  of  the  employer  ends,  and  that  point  is  between  those 
deserving  cases  of  accidents,  and  the  undeserving  cases,  but  as  I  say  in  view  of  the 
expense  of  litigation  in  determining  in  each  case  who  was  at  fault,  the  whole  series 
ought  to  be  covered.  This  principle  is  so  elementary  that  its  mere  statement  almost 
calls  for  apology;  yet  this  very  principle  would  be  violated  by  throwing  on 
employers  the  burden  of  compensating  workmen  for  injuries-due  to  their  own  fault. 
Take  the  case  of  the  man  lying  on  the  belt.  On  what  principle  of  natural  justice 
can  you  justify  the  employer  bearing  the  compensation  of  that  man  who  lay  on 
the  belt  to  sleep  ? 

Mr.  Bancroft  :  You  have  already  admitted  that  even  if  that  man  did  lie  on 
the  belt  and  was  killed  that  his  dependants  should  have  compensation. 

Mr.  Wegenast:  No,  not  on  any  grounds  of  natural  justice;  simply  on  the 
ground  of  expediency. 

Mr.  Bancroft  :     You  have  admitted  it  should  be  done  ? 

Mr.  Wegenast:     On  the  ground  of  expediency. 

"  So  long  as  any  injuries  arc  due  in  whole  or  in  part  to  the  fault  of  the  work- 
men elementary  principles  of  justice  demand  that  all  should  bear  a  share  of  the 
pecuniary  responsibility. 

"If  the  pecuniary  consideration  were  the  only  one  it  might  be  partially 
counterbalanced  by  the  inconvenience  of  collecting  the  workman's  portion  and  the 
irritation  attendant  thereupon.  But  there  are  other  and  weightier  reasons  for  a 
recognition  of  the  principle  of  contribution.  It  will  not  be  seriously  disputed  that 
the  highest  degree  of  co-operative  effort  on  the  part  of  the  workman  to  the  end  of 
preventing  accidents,  cannot  be  secured  without  throwing  upon  him  some  direct 
25  L. 


386  MINUTES  OF  EVIDENCE:  Xo.  65 


pecuniary  responsibility.  If  there  should  be  irritation  attendant  upon  the  practice 
of  deducting  from  wages  a  portion  of  the  insurance  premium,  or  if  there  should  be 
dissatisfaction  with  the  "  waiting  period  "  these  serve  to  keep  before  the  mind  of 
the  workmen  not  only  individually  but  through  their  organization,  to  a  degree  not 
otherwise  possible,  the  interests  of  the  workmen  in  systematic  and  scientific  methods 
of  accident  prevention." 

Mr.  Bancroft  :  At  the  present  time  you  have  stated  that  there  are  employers 
in  Ontario  who  already  have  that  kind  of  a  system  where  employees  contribute,  that 
they  have  an  agreement,  and  often  this  implies  that  it  is  compulsory.  You  have 
heard  what  Mr.  Tindall  said  about  the  foremen  using  their  position  to  force 
payments,  and  you  will  admit  that  many  a  man  has  joined  them  for  the  sake  of 
Dot  losing  his  job.     Has  that  stopped  accidents? 

Mr.  Wegenast:     Yes. 

Mr.  Bancroft  :  No  sir.  We  will  have  that  out.  I  could  bring  witness  after 
witness  here  to  prove  it. 

Mr.  Gibbons  :  Your  argument  is  so  inconsistent.  You  point  out  about  the 
litigation,  and  you  say  in  the  next  breath  no  self-respecting  man  would  oppose  it. 
Now,  there  must  be  no  self-respecting  man  in  the  ranks  of  labour. 

Mr.  Wegenast:     What  is  the  inference? 

Mr.  Gibbons  :  The  inference  is  you  are  inconsistent.  You  say  it  will  cause 
irritation,  and  on  the  other  hand  it  won't. 

Mr.  Wegenast:     You  have  not  drawn  the  proper  conclusions. 

Mr.  Gibbons  :  You  would  say  there  was  no  self-respecting  man  in  the  labour 
ranks. 

Mr.  Wegenast:     Well,  I  didn't  want  to  say  it. 

Mr.  Gibbons  :  We  might  say  there  was  no  self-respecting  employer  or  manu- 
facturer, but  we  wouldn't  even  throw  out  that  inference.  I  think  it  would  be 
uncalled  for. 

Mr.  Wegenast  :  I  want  it  to  be  understood  as  not  only  making  the  inference, 
but  the  statement,  that  the  self-respect  of  the  workman  demands  that  he  should 
contribute  something  towards  the  cost  of  an  insurance  which  covers  not  only  the 
employers  hazard,  and  the  hazard  of  the  industry,  but  the  employee's  own  fault, 
and  any  other  view  of  the  operation  of  a  system  which  does  not  embody  that  view 
means  humiliation  and  pauperization  of  the  workman.  Whether  the  opposition 
on  the  part  of  the  workman  is  due  to  the  want  of  appreciation  or  the  want  of 
snlf-respect  I  don't  know. 

Mr.  Gibbons  :  At  the  present  time  they  may  collect  compensation  for  any 
accident  that  is  due  to  the  negligence  of  the  employer.  On  the  other  hand  if  they 
took  and  collected  a  fund  of  their  own.  or  as  the  Unions  do  at  the  present  time, 
pay  under  any  circumstances,  might  they  not  just  as  well  contribute  to  a  fund  of 
iheir  own  and  pay  this? 

The  Commissioner:  You  forget  the  forty  per  cent,  or  so  where  you  would 
not  recover  anything  at  all,  where  they  are  not  at  fault  and  the  employer  is  not  at 
fault ;  in  these  necessary  risks  of  the  business  the  employer  is  not  liable.  It  is 
something  incidental  to  their  occupation,  and  that  they  get  the  benefit  for  under 
this  system.  You  see  now  a  man  can  only  recover  if  his  employer,  not  through  a 
fellow-workman,  but  through  somebody  in  a  position  of  superintendence,  has  been 
guilty  of  negligence,  with  some  exceptions,  and  if  the  workman  himself  has  been 
oniiltv  of  negligence  and  without  his  negligence  the  accident  would  not  have 
happened,  then  he  cannot  recover  at  all.  So  you  see  it  cuts  him  down  to  a  very 
small  field  where  under  the  present  law  he  can  recover. 


1912  WOKKMExVS  COMPENSATION  COMMISSION.  387 


Mr.  Wegenast:  It  is  pointed  out  in  the  reports  of  the  Illinois  Commission 
with  great  force,  and  it  has  been  pointed  out  by  Mr.  Boyd  here  to-day,  that  (the 
numher  of  accidents  winch  would  he  added  to  the  present  list  of  recoverable  accidents 
for  which  compensation  could  lie  recovered,  the  percentage  would  be  very  small, 
something  about  seven  per  cent. 

Mr.  Gibbons:  You  stated  that  the  laws  were  not  made  for  the  honest  man. 
We  are  going  on  that  basis.  Now,  in  this  case  we  will  suppose  that  a  very  small 
percentage  of  the  employers  would  be  dishonest  because  they  are  all  self-respecting, 
but  supposing  it  would  induce  them  to  post  up  rules  a  violation  which  would  make 
the  employee  guilty  of  negligence,  and  rules  are  just  put  up  for  that  purpose. 
We  know  cases  of  that.  I  have  them  every  day  in  front  of  me  where  the  rule  is 
put  up  to  be  broken,  but  at  the  same  time  it  protects  the  employer;  it  protects  the 
company. 

Mb.  Wegenast  :  What  protection  would  there  be  under  such  a  system  as  we 
propose?     AVhat  object? 

Mr.  Bancroft  :     It  would  throw  more  of  the  payment  upon  the  men. 

Mr.  Wegenast:  Let  me  say  frankly  what  is  in  my  mind,  that  a  minimum 
should  be  fixed  in  the  act.  I  think  ten  per  cent,  is  too  low.  I  think  twenty-five 
per  cent  is  high  enough. 

The  Commissioner  :  That  would  be  to  take  out  of  the  wage  earner,  on  the 
figures  you  gave  us,  from  a  million  to  a  million  and  a  half  dollars  per  annum.  You 
said  this  morning  from  four  to  six  million. 

Mr.  Wegenast  :  Well,  on  the  basis  of  twenty  five  per  cent,  out  of  $4,000,000 
it  would  take  $1,000,000,  and  out  of  $6,000,000  it  would  take  $1,500,000.  That 
is  on  25  per  cent.     On  a  ten  per  cent,  basis  it  would  take  off  $400,000  and  $600,000. 

The  Commissioner  :     It  is  a  big  sum  in  the  aggregate. 

Mr.  Wegenast  :  It  is  a  tremendous  shock  on  the  wage-paying  capacity  of 
industry. 

Mr.  Gtbbons  :  When  we  come  to  ask  for  an  increase  of  wages,  and  that  is 
determined  by  arbitration  without  a  strike,  is  it  not  usually  settled  by  just  the  cost 
of  living?  That  is  the  basis  they  go  on.  I  have  always  had  to  submit  a  statement 
of  the  cost  of  living,  just  what  a  man  could  live  on,  and  that  was  the  basis  of  the 
wages.  Now,  if  a  man  only  gets  the  cost  of  living  how  is  he  going  to  contribute 
without  he  denies  his  family  and  allows  his  children  to  go  barefooted? 

Mr.  Wegenast:  I  want  to  answer  that  with  this  suggestion,  which  is  so 
absurd  that  it  answers  itself.  Would  it  not  be  a  good  plan  to  work  out  a  com- 
pensation system  by  giving  each  man  the  increase  of  salary  requisite  to  enable  him 
to  insure  himself  in  an  accident  company? 

Mr.  Gibbons:     That  is  what  they  do  with  policemen  and  firemen. 

Mr.  Wegenast  :  Would  anyone  contend  that  one  workman  out  of  one  hundred 
would  use  the  money  for  the  purpose  of  insuring  himself:  The  whole  basis  of  the 
compensation  system  is  the  improvidence  of  the  workmen. 

Mr.  Bancroet  :  If  you  want  a  contribution  from  the  workmen  I  suppose 
all  the  employers  will  raise  the  wages  of  the  employees  in  Ontario  to  meet  that 
compensation  ? 

Mr.  Wegenast:  I  am  quite  willing  to  make  the  suggestion,  if  that  will  do 
any  good. 

Mr.  Bancroft:  Why  do  they  not  pay  the  whole  tax  instead  of  doing  it  in 
that  way? 

Mr.  Wegenast:  If  it  is  an  adjustment  in  the  wages,  in  the  ultimate  result 
it  works  out  in  one  wa3r  a«  well  as  the  other. 


388  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Bancroft:  I  don't  like  to  say  you  haven't  thought  of  this  situation 
that  we  have  thought  about.  In  Toronto  and  very  big  cities  there  are  hundreds 
of  girls  employed,  and  we  have  been  discussing  in  the  moral  reform  meetings  how 
girls  are  driven  into  the  white  slave  traffic,  and  we  have  had  it  admitted  by  min- 
isters all  over  this  country  and  otherwise  that  it  is  an  economic  question,  and  if 
those  girls  were  given  enough  to  live  on  properly  there  would  be  pactically  a 
minimum  of  that  traffic. 

The  Commissioner  :     That  is  very  weak  evidence. 

Mr.  Bancroft:  They  are  proposing  to  take  the  wages  of  these  girls  at  the 
same  time  they  are  proposing  to  deduct  the  wages  of  the  men.  Is  that  not  a  con- 
sideration? It  is  going  to  cover  everybody,  even  the  girls  whose  wages  now  are  at 
a  minimum. 

Mr.  Wegenast  :  In  the  Commision  by  the  State  of  Illinois  a  strong  argument 
is  made  out  of  a  feature  akin  to  that  mentioned  by  Mr.  Bancroft.  The  question  is 
raised  there,  what  becomes  of  the  girls  in  families  where  the  father  or  wage-earner 
is  cut  off,  and  the  question  is  answered  with  a  blank.  These  girls  under  the 
system  we  propose,  under  a  rational  insurance  system,  would  receive  their  compen- 
sation, and  is  it  too  much  to  expect  that  in  return  for  compensation  which  is  pro- 
vided to  a  very  large  degree  by  the  employer  that  they  shall  contibute  their  pittance  ? 
Doesn't  self-respect  have  some  place  in  the  matter? 

Mr.  Bancroft  :  I  do  not  think  under  the  social  system  under  which  we  live 
there  is  any  justice  whatever  for  a  proposition  by  any  self-respecting  employer  to 
take  the  wages  of  the  workmen. 

Mr.  Wegenast  :  "  Collective  effort  on  the  part  of  workmen  is  in  fact  as 
necessary  as  collective  effort  on  the  part  of  the  employers  in  order  to  obtain  a  full 
measure  of  success  in  prevention  of  accidents." 

We  want  not  only  the  individual  efforts  of  the  employer.  Experience 
shows,  and  overwhelming  statistics  show  that  the  best  results  in  accident 
prevention  cannot  be  obtained  without  bringing  employers  together  in  some  collec- 
tive capacity.  The  great  success  of  the  German  system  is  due,  not  wholly,  but  in 
a  very  large  measure  indeed,  to  the  fact  that  it  produces  collective  effort.  What 
I  say  is  you  cannot  have  the  highest  degree  of  effort  on  the  part  of  the  workmen 
without  creating  some  collective  effort. 

The  Commissioner  :  Is  it  not  a  little  over-stated  that  the  wage  earners  as  a 
class  get  only  barely  what  they  can  live  on?  If  that  is  so  where  do  all  these 
accumulated  funds  thai  we  have  lately  heard  about  in  the  different  trade-unions 
come  from?     They  must  come  from  the  workmen. 

Mr.  Bancroft:  Yes,  your  Lordship,  but  it  is  recognized  as  an  economic  basis 
to-day  that  wherever  yon  go  in  the  world  a  man's  wages  represents  the  amount  that 
is  necessary  to  reproduce  his  labour  power  so  he  can  serve  it  out  again  on  the 
morrow. 

The  Commissioner:     TTe  must  have  a  larger  margin  than  that? 

Ali;.  Bancroft:     They  are  kept  up  largely  by  self-denial. 

The  Commissioner:  How  many  millions  would  be  saved  if  there  was  no 
liquor  drunk  by  the  workmgman? 

Mr.  Bancroft:  1  didn't  know  that  all  the  liquor  was  drunk  by  the  work- 
ingman.      I    fancied   I  lie  manufacturers  were  consumers  in  that  respect. 

Mr.  Doggett:  1  don't  think  there  is  ever  a  workingman  if  lie  didn't  go  into 
the  saloon  but  could  put  that  money,  or  that  money  could  lie  used  to  buy  clothes 
to  put  on  the  backs  of  bis  children.  As  a  matter  of  fact  they  are  going  without 
something  else  to  supply  themselves  with  that  particular  want. 


1912  WORKMEN'S  COMPENSATION   commission.  389 


The  Com  missionee  :     There  are  a  lot  of  young  men  who  have  not  got  children. 

Mr.  Gibbons:  We  are  here  to  talk  about  British  laws,  and  we  are  all  sroins 
into  Germany,  and  if  we  get  into  this  trouble  that  is  threatened  with  Germany  Ave 
will  be  tempted  to  take  the  side  of  Germany  and  work  detrimentally  to  the  British 
Empire. 

Mi;.  Wegenast:  Would  yon  prefer  the  British  Act  to  the  Act  in  the  State  of 
Ohio,  and  in  Germany? 

Mr.  Gibbons:  I  certainly  would  if  the  labour  men  have  to  contribute  one- 
third  or  one-half  of  it. 

Mr.  Wegenast:     That  is  a  statement  so — 

Mr.  Gibbons:     Absurd!  Ha.  ha. 

Mr.  Wegenast:     Yes.  absurd. 

Mr.  Bancroft:  We  are  asking  for  what  they  are  asking  in  Great  Britain 
to-day.  state  insurance  with  compulsory  insurance. 

Mr.  Wegenast:  That  answers  Air.  Gibbons  in  a  different  way  from  the 
answer  I  got. 

Mr.  Gibbons:  I  would  say  I  would  prefer  it  to  this  that  you  are  proposing. 
T  didn't  say  1  would  prefer  it  to  a  modern  act. 

Mr.  Wegenast:  "While  the  general  tendency  is  for  workmen  to  oppose  and 
employers  to  favor  contribution  from  the  workmen  this  is  not  uniformly  the  case. 
In  Germany  where  the  relations  arising  out  of  the  workman's  contribution  are 
best  understood  the  tendency  is  to  some  extent  in  the  other  direction.  During 
the  last  session  of  the  Reichstag  an  amendment  proposed  by  employers  and  bitterly 
opposed  by  workmen  was  passed  increasing  the  contribution  of  employers  to  the 
sickness  fund  to  from  one-third  to  one-half-"' 

The  Commissioner:  That  is  only  a  partial  statement  of  the  case.  Of 
course  it  was  a  matter  of  the  control  of  the  administration  of  the  fund.  There 
is  a  big  difference  there.  You  just  take  that  in  the  same  spirit  that  you  regard 
that  in  this  country.  The  socialists  in  Germany  are  the  trade-unions.  The 
socialist  movement  in  Germany  was  the  one  that  organized  the  trade-unions  for 
industrial  purposes. 

Mr.  Wegenast:  The  motive  of  the  workmen  in  opposing  the  change  was 
to  maintain  their  representation  on   the  management   of   the   Association. 

"There  is,  therefore,  this  further  consideration  in  connection  with  the  question 
of  contribution  that  the  extent  to  which  the  workmen  participate  in  the  administra- 
tion of  the  system  will  naturally  depend  upon  whether  and  to  what  extent  work- 
men contribute  to  the  insurance  fund.  It  has  been  already  pointed  out  that  the 
principle  of  contribution  may  be  embodied  in  a  number  of  ways.  The  most 
direct  method  is  that  of  collecting  from  the  workman  a  proportion  of  the  insurance 
premium.  This  is  practicable  only  by  having  the  employer  pay  the  whole  premium 
and  deduct  the  proper  amount  from  the  wages  of  the  workmen.  Another  method 
is  to  interpose  a  considerable  'waiting  period'  between  the  occurrence  of  the  injury 
and  the  beginning  of  the  compensation  payments,  thus  leaving  workmen  to  bear 
minor  injuries  either  individually  or  through  collective  first  aid  or  sickness  funds. 
A  third  method  is  by  reduction  of  the  scale  of  compensation,  leaving  workmen  to 
individually  bear  a  greater  portion  of  the  burden  of  all  injuries." 

I  would  like  to  point  out  in  connect i<m  with  that  a  fact  that  is  not  generally 
realized,  that  the  50  per  cent,  basis  in  the  Quebec  Workmen's  Compensation  Act 
was  arrived  at  as  a  compromise  on  a  question  of  contribution.  It  was  said  we 
will  pay  him  for  half  his  injuries  if  he  pays  the  other  half. 

Mr.  Bancroft:     To-day  is  it  not  the  fact  that  it  is  illegal  for  an  employer 


390  MINUTES  OF  EVIDENCE:  No.  65 

under  the  common  law  to  take  the  wages  of  a  workman  for  anything  without 
his  consent? 

Mr.  Wegenast  :  Well,  I  know  one  method  by  which  you  can  take  it  and  take 
it  away  altogether,  by  garnisheeing  it. 

Mr.  Bancroft:  I  know  that  is  a  fairly  good  joke  all  right,  but  is  it  not 
a  fact  that  the  employer  cannot  legally  take  his  employees'  wages  to-day? 

The  Commissioner:     That  is  statutory,  not  common  law. 

Mr.  Bancroft  :  And  you  are  suggesting  legislation  that  will  remove  a  pro- 
tection which  the  workman  has  to-day,  which  has  been  very  valuable  to  him  in 
times  past. 

The  Commissioner:  I  do  not  think  we  have  got  any  law  of  that  kind  in 
this  Province. 

Mr-  Bancroft  :  I  remember  several  cases  where  men  who  had  made  mistakes 
were  threatened  with  a  reduction  of  their  wages  by  reason  of  those  mistakes,  and 
upon  notifying  the  employer  that  they  would  sue  for  it  the  matter  was  dropped. 

Mr.  Wegenast:  "It  is  submitted  that  the  last  of  these  three  methods  is 
the  least  satisfactory  and  that  in  preference  one  or  both  of  the  other  two  methods 
should  be  adopted."  I  may  say  the  third  method  is  by  reduction  of  the  scale 
of  compensation. 

The  Commissioner  :  But  my  suggestion  to  you,  which  you  said  you  would 
••afterwards  answer,  was  not  that  at  all.  Mine  was  about  allowing  the  Board  to 
make  a  reduction  where  the  accident  had  been  caused  by  the  negligence  of  the 
workmen. 

Mr.  Wegenast  :  Well,  it  of  course  depends  on  the  amount  of  the  reduction. 
If  it  is  not  large  enough  it  has  no  salutary  effect,  and  if  it  is  too  large  then  it  falls 
Upon  the  innocent  dependant. 

The  Commissioner:  Well,  applying  some  of  your  arguments,  if  the  work- 
man knew  he  was  liable  to  have  his  compensation  reduced  if  the  accident  was 
wholly  due  to  his  serious  misconduct  would  that  not  be  a  check  upon   him? 

Mr.  Wegenast  :  Yes,  but  there  I  am  more  magnanimous  than  my  friends 
opposite  give  me  credit  for.  I  said  all  these  accidents  should  be  compensated, 
partly  on  account  of  the  expense  of  determining  the  question  of  liability. 

The  Commissioner  :  Not  if  this  Board  is  to  settle  everything,  if  you  adopt 
the  Ohio  plan  and  give  them  a  wide  discretion.  This  doctrine  of  contributory 
negligence  has  not  prevailed,  but  if  a  collision  occurs  and  both  are  at  fault  the 
loss  is  divided- 

Me.  Wegenast:  The  objection  to  that  is  there  will  inevitably  be  an  extension 
of  the  principle  in  the  case  of  the  death  of  a  man,  because  it  is  expedient  on  human- 
itarian grounds.  The  dependants  suffer  just  as  much.  It  does  not  make  it  any 
more  just,  but  still  it  comes. 

The  Commissioner:  Could  you  not  afford  in  the  case  of  a  fatal  accident 
to  submit  to  that? 

Mr.  Wegen  \st:     It  appears  to  me  there  is  a  discrimination  there. 

The  Commissioner:  It  is  not  defensible  on  an  economic  basis  upon  which 
the  thing  is  put-  Although  Mr.  Boyd  did  not  agree  to  it  it  seemed  to  me  to 
introduce  the  eleemosynary  or  charitable  aspect  of  the  thing. 

Mi:.  Wegenast:  That  is  one  of  the  objects  in  saying  that  carelessness  should 
be  penalized.  I  am  not  speaking  about  gross  carelessness  in  the  way  it  is  referred 
to  in  legal  actions.  The  language  of  our  clause  was  a  subject  of  controversy 
and  alternatives  wire  suggested,  but   the  matter  was  leii  in  that  way  to  suit  the 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  391 

views  of  one  or  two  members  who  thought  the  idea  was  expressed  in  its  terms.  I 
prefer  the  general  word  "misconduct"  and  what  I  had  in  my  mind  there  was  that 
there  should  lie  some  way  of  penalizing.  I  don't  know  that  the  way  under  the 
Washington  Act  is  the  "best,  but  I  would  not  like  to  say  it  is  not. 

The  Commissioner:  Misconduct  may  cover  very  little  things  and  very  large 
things. 

Mr.  Wegenast.:  I  am  willing  to  have  that  qualified  in  any  way  that  is 
reasonable. 

The  Commissioner:  The  way  it  was  interpreted  I  think  was  perfectly  fair, 
"serious  and  wilful  misconduct?" 

Mr.  Wegenast  :     I  must  say  I  myself  favoured  those  exact  words. 

The  Commissioner:     It  must  be  both  serious  and  intentional. 

Mr.  Wegenast  :  I  think  it  expresses  the  intention  of  the  Committee  better 
than  the  words  that  are  there.  It  is  in  the  acts  of  six  different  provinces,  and  I 
am  quite  willing,  but  I  doubt  still  whether  it  is  the  proper  way  of  penalizing. 

Mr.  Bancroft  :     That  is  covered  by  the  other  in  case  of  death  and  disability. 

The  Commissioner:  Now,  if  you  added  to  that  in  this  case  there  should 
not  be  an  entire  loss  of  compensation,  but  it  should  be  scaled  down  by  the  Board? 

Mr.  Wegenast:     Yes,  I  quite  agree  with  that. 

The  Commissioner  :  That  would  not  create  the  irritation  by  colllecting  from 
every  man  something  every  week  or  every  month. 

Mr.  Wegenast:  I  was  not  thinking  of  that  feature,  because  the  proposition 
is  not  to  weed  out  all  the  cases  due  to  the  workman's  fault.  There  must  be  a 
distinction  drawn  there.  The  cases  covered  by  an  exception  in  favour  of  wilful 
misconduct  might  be,  say,  only  five  per  cent.,  and  the  cases  weeded  out  by  the 
question  of  fault,  or  contributory  fault,  or  whatever  it  might  be,  might  perhaps 
be  twenty-five  or  thirty  per  cent. 

The  Commissioner  :  I  thought  you  started  out  with  the  assertion  that  the 
doctrine  of  contributory  negligence  should  go? 

Mr.  Wegenast:  Provided  there  is  a  contribution  to  make  up  the  workmen's 
share.  Those  are  two  different  classes  although  the  one  includes  the  other.  The 
twenty-five  per  cent,  will  include  the  five  per  cent,  if  that  is  the  proper  percentage. 

Mr.  Gibbons:  Just  take  as  a  basis,  supposing  there  are  one  hundred  work- 
men, and  ninety-nine  of  those  men  are  carefu'l  and  do  everything  possible  to  avoid 
an  accident,  and  there  is  one  careless  man.  There  the  other  ninety-nine  men  con- 
tribute to  protect  that  careless  man. 

Mr.  Wegenast:  Yes,  because  the  employer  is  doing  that  very  thing  him- 
self. 

Mr.  Gibbons:  We  have  understood  that  was  a  charge  upon  the  industry, 
and  in    the  last  analysis  the  consumer  would  pay  for  it. 

Mr.  Wegenast:  We  have  also  understood  that  in  the  last  analysis  the 
protection  is  paid. 

I  want  to  point  out  that  the  question  of  contribution  goes  farther  than  that. 

The  Commissioner:     You  want  more,  of  course. 

Mr.  Wegenast:  It  is  not  that  Ave  want  more.  The  question  of  penalizing 
by  deduction  of  compensation  would  cover  perhaps  two,  three,  four  or  five  per 
cent-  of  the  cases  of  wilful  misconduct. 

Mr.  Gibbons:  Isn't  he  penalized  already?  He  only  gets  compensation  for 
part  of  the  loss  of  his  wages.  If  a  man  has  an  arm  taken  off,  or  a  leg  taken  off, 
look  at  the  amount  of  suffering?  Isn't  he  penalized  already?  It  is  like  hang- 
in  o-  a  man  and  shooting  him  aiterwards. 


392  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Wegenast  :  I  admit  all  that,  but  the  five  per  cent,  that  is  covered  in 
the  case  of  wilful  misconduct  is  one  thing.  The  extra  twenty  per  cent,  that  is 
covered  by  the  fault,  or  carelessness,  or  negligence,  to  use  the  term  of  the  British 
Act— 

The  Commissioner:  But  under  modern  conditions  it  is  impossible  for  the 
man  to  work  without  a  very  critical  employer  saying  he  was  careless.  It  is 
almost  necessary  sometimes,  he  works  at  such  high  speed. 

Mr.  Wegenast:  That  simply  goes  to  prove  it  may  be  less  than  twenty:five 
per  cent,  on  that  account,  but  whatever  the  proportion  is.  There  is  a  proportion 
of  accidents  over  and  above  what  is  represented-  by  serious  and  wilful  misconduct- 

Mr.  Doggett:     AY  hat  about  if  death  occurs? 

Mr.  AAtegenast:  I  am  saying,  cover  them  all.  What  I  have  thought  of,  and 
I  haven't  thought  it  out  to  any  extent,  is  that  in  the  case  of  a  man  who  is  guilty 
of  misconduct  the  money  might  be  paid  to  his  wife,  or  paid  to  some  trustee  for  him 
so  as  not  to  give  him  the  handling  of  the  money-  It  is  a  very  feeble  way  of 
meeting  the  tiling.     Or  he  might  be  sent  to  jail   or  the  workhouse. 


TENTH  SITTING. 


Legislative  Building,  Toronto. 

Tuesday,  23rd  January,  8  p.m. 

Present:  Sir  AYilliam  B.  Meredith,  Commissioner. 
Mr.  AY.  B.  Wilkinson,  Law  Clerk. 

Mr.  Wegenast:  As  I  intimated  at  the  last  session,  Mr.  Miles  M.  Dawson 
is  with  us,  and  is  ready  to  give  your  Lordship  any  information  he  can.  I  do 
not  suppose  he  needs  any  introduction  as  he  is  so  well  known  in  Toronto.  I 
thought  it  would  be  just  as  well  if  Air.  Dawson  would  make  whatever  preliminary 
statement  he  wished  to  make,  and  then  we  could  ask  him   some  questions. 

The  Commissioner:  It  might.be  as  well  if  you  would  ask  him  to  make  a 
statement  along  the  lines  you  desire,  as  he  may  make  some  statements  not  pertinent 
to  the  inquiry. 

Mr.  Wegenast  :  I  think  Mr.  Dawson  knows  what  the  scope  of  the  inquiry 
is,  and  [  judge  from  the  evidence  given  by  him  before  the  Federal  Commission 
a  good  deal  may  be  left  to  his  judgment  as  to  the  form  of  his  remarks. 

Mi:.  Miles  M.  Dawson:  I  am  more  or  less  embarrassed  to  take  that  course 
not  because  I  do  not  think  I  could  say  things  which  might  be  useful  to  you, 
but  because  there  is  such  a  volume  of  matter.  T  would  suggest  that  Air.  AA>genast 
should  indicate  by  questions  or  otherwise  pretty  generally  what  be  would  like  to 
have  mo  go  into.  1  might  explain  I  do  not  feel  I  am  here  in  the  slightest  degree 
to  lay  oui  plans  of  insurance  for  the  Province  of  Ontario  or  for  the  Dominion  of 
Canada.  I  am  here  because  of  having  made  a  number  of  very  careful  investiga- 
tions on  the  subject,  one  of  them  for.  the  Russell  Sage  Foundation  in  New  York, 
by  travelling  in  Europe  as  well  as  studying  it.  and  the  oilier  for  the  Federal 
Government   of  the  United  States.     Mr.   Wegenasl   having  examined  these  things 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  393 

I  think  got  the  impression  that  perhaps  some  of  the  matters  could  he  hrought 
out  more  clearly  by  my  giving  you  some  information  instead  of  getting  it  from  the 
bare  report.  However,  I  should  be  very  fearful  to  enter  upon  it  of  my  own 
initiative  and  I  should  feel  it  would  not  be  as  beneficial  hardly  as  if  I  were 
directed. 

Tin:  Commissioner  :  As  far  as  the  employers  and  the  employees  are  con- 
cerned, as  far  as  they  view  it,  it  is  perhaps  narrowed  down  to  four  or  five  points. 

Mr.  Dawson:  If  I  can  help  you  on  any  of  those  points  I  shall  be  very  glad. 

Mr.  Wegenast:  You  might  give  us  some  information  on  this  point,  Mr. 
Dawson.  I  have  drawn  the  distinction  in  my  brief,  and  in  the  argument  before 
his  Lordship,  between  individual  liability  systems,  collective  liability  systems, 
and  State  liability  systems  of  workmen's  compensation.  Could  you  give  us  your 
opinion  as  to  the  merits  of  these  respective  systems,  and  I  might  suggest  that 
perhaps  the  expression  might  assume  the  historical  form  in  which  you  put  the 
matter  before  the  Federal  Commission  of  the  United   States. 

Mr.  Dawson:     Well,  I  shall  be  pleased  to  do  what  I  can  in  that  direction. 

The  subject  of  compensation  as  distinguished  from  liability  of  employers 
first  of  all  was  brought  forward  in  Germany  as  you  know,  and  there  from  the 
start  it  was  recognized  to  be  a  matter  which,  while  primarily  between  the  employer 
and  the  employee,  was  really  between  the  community  as  a  consumer  and  the  com- 
munity as  a  producer,  and  consequently  the  original  plan  as  introduced  in  Ger- 
many was  one  of  taxation  under  which  the  industry  would  be  taxed  for  the 
purpose  of  providing  a  fund  from  which  the  workmen  would  be  compensated, 
and  in  various  documents  relating  to  that  the  idea  that  I  have  just  expressed  was 
very  frequently  brought  forward. 

Another  thing  that  was  at  that  time  pretty  fully  recognized,  and  the  truth  of 
which  I  think  there  can  be  no  question,  was  this,  that  already  the  people  of 
Germany  were  paying  compensation  precisely  as  in  Canada  and  all  other  civilized 
countries.  The  widows  and  families  of  workingmen  who  were  killed  were  not 
being  permitted  to  starve.  They  were  being  sheltered  and  fed  and  clothed  by 
the  community  in  one  way  or  another.  It  was  also  recognized  that  this  con- 
dition would  stiil  continue  as  to  the  families  of  all  workmen  who  had  already 
been  disabled  or  killed,  that  the  community  would  require  through  its  charitable 
institutions,  either  public  or  private,  through  its  connectional  institutions,  and 
other  agencies,  to  raise  money  and  take  care  of  those  families.  They  treated  it 
from  the  beginning  in  Germany  consequently  merely  as  a  plan  by  means  of 
which  the  families  of  workmen  who  bad  reached  that  stage,  not  through  some 
serious  criminal  or  almost  criminal  conduct  of  the  father  of  the  family,  such  as 
for  instance  chronic  intoxication,  or  actual  crime,  but  merely  through  accident, 
should  be  supported,  not  as  a  matter  of  charity,  but  through  some  compensation 
system  that  would  preserve  their  self-respect,  and  thus  enable  them  the  better 
to  recover  from  the  misfortune,  and  to  re-assume,  or  in  case  of  children  assume 
a  position  as  an  industrious  workman  in  the  community.  Because  of  that 
in  large  part  they  also  introduced  in  Germany  this  idea  that  they  would  not 
collect  from  the  employer  a  larger  amount  currently,  except  in  a  particular  respect 
which  I  shall  mention  in  a  moment,  than  was  needed  to  meet  the  current  dis- 
bursements. This  would  mean  that  more  and  more  people  would  be  on  the 
fund  as  years  went  by,  and  only  after  twenty-five  years,  or  such  a  matter,  would 
it  reach  an  equilibrium  as  to  the  number  and  the  amount  to  be  expended.  They 
did  that  on  two  grounds,  first  that  it  was  not  fair  to  impose  upon  the  community 


394  MINUTES  OF  EVIDENCE:  No.  65 

which  would  gradually  be  getting  rid  of  the  burden  that  it  was  already  carry- 
ing a  large  new  burden  immediately  of  putting  up  capitalized  values  for  future 
payments,  and  on  the  further  ground  that  the  German  industries  as  a  whole 
would  be  much  less  affected  if  the  cost  came  upon  them  gradually,  and  there 
would  be  retained  in  industry  a  very  large  sum  of  money  which  otherwise  would 
be  withdrawn  and  deposited  in  reserve  funds  and  invested  at  low  rates  of  interest, 
and  that  of  itself  of  course  would  have  a  beneficial  effect  upon  German  industry. 
Now,  one  purpose,  and  an  avowed  purpose,  for  the  introduction  of  this  plan  in 
Germany  was  to  head  off  socialism-  When  it  was  brought  forward  by  Emperor 
William  in  a  state  paper,  which  has  always  been  credited  to  Prince  Bismarck, 
that  was  one  of  the  avowed  statements  of  purpose.  At  that  time  historically  the 
results  of  the  Paris  Commune  had  spread  socialism  throughout  France  very 
broadly,  which  has  since  then  resulted  in  a  socialistic  government  in  France,  as 
you  know,  and  it  seemed  to  be  making  greater  headway  in  Germany.  Since  then 
although  there  has  been  a  growth  of  socialistic  sentiment  and  the  party  itself 
has  grown  in  numbers  it  has  not  grown  in  relative  strength,  and  to-day  can 
boast  but  a  relatively  small  proportion  of  the  membership  of  the  Reichstag.  I 
think  that  purpose  they  achieved,  and  the  further  purpose  of  assisting  the  people 
of  Germany  to  solve  successfully  the  problem  of  providing  for  the  support  of 
workmen  and  their  families  under  these  conditions  without  breaking  down  their 
self-respect,  and  to  conserve  them  in  every  possible  way  for  the  good  of  the  entire 
country  is  also  believed  to  have  been  successful.  Among  other  things  it  raised 
the  average  longevity  of  workmen  in  Germany  or  the  German  people  in  general 
almost  one-half  during  that  period,  which  is  largely  ascribed  to  the  good  con- 
ditions thus  induced.  The  public  and  private  charities  are  not  spending  more 
money  than  they  did  before,  but  it  is  undoubtedly  true  that  the  direction  in 
which  the  money  is  spent  is  very  different,  and  it  is  the  testimony  of  a  Com- 
mission sent  over  by  the  British  Trades-Union  Congress  some  two  or  three  years 
ago  that  they  did  not  find  any  slums  whatever  in  Germany.  In  other  words  it 
has  eliminated  and  prevented  those  conditions.  Now,  this  spread  to  other  coun- 
tries. Austria  first  took  it  up  and  introduced  the  scheme  as  a  system  of  State 
insurance  pure  and  simple,  or  virtually  so,  and  it  undertook  to  set  up  capitalized 
values.  They  divided  Austria  into  seven  districts  and  in  but  one  of  those  dis- 
tricts have  they  succeeded  in  maintaining  capitalized  values.  It  then  spread  to 
Norway,  which  was  the  next  country  to  take  it  up.  It  adopted  a  pure  State 
insurance  system  with  capitalized  value  reserves,  and  it  has  maintained  them, 
but  only  by  the  Norwegian  Parliament  undertaking  to  make  good  a  deficiency. 
About  that  time  the  general  idea  seemed  to  appeal  to  many  countries,  but  the 
idea  of  dealing  with  it  as  a  matter  between  the  public  as  consumers  and  the 
public  as  producers  did  not  seem  to  appeal  so  strongly,  and  consequently  Great 
Britain,  France  and  Denmark. at  about  the  same  time  introduced  laws  providing 
for  compensation  to  be  made  to  workmen  for  accidents  on  about  the  same  lines 
as  in  Germany,  but  instead  of  providing  for  it  being  an  insurance  system,  placed 
the  liability  directly  on  the  employer-  In  France  alone  of  those  countries  was 
there  any  State  insurance  connected  with  it.  In  France  the  State  organized 
a  department  in  which  employers  might  voluntarily  insure,  but  the  State  would 
not  cover  anything  but  permanent  injuries  and  deaths,  and  consequently  very  few 
relatively  have  insured  in  it.  The  State  in  Ftance  also  introduced  one  other  idea, 
and  Hint  was  the  collection  from  all  employers  of  a  small  tax  for  the  purpose 
of  guaranteeing  that  if  an  employer  who  was  liable  for  a  benefit  became  insolvent 


1912  WORKMEN'S  COMPENSATION   COMMISSION'.  395 


the  benefit  would  still  be  paid,  or  if  an  insurance  company  which  was  liable  for  it 
failed  the  benefit  would  still  be  paid.  The  tide  about  this  time  had  run  as  far  in 
that  direction  as  it  could,  and  it  turned.  I  might  say  in  that  connection  that  Bel- 
gium followed  these  countries  modelling  it  largely  upon  that  of  France.  When  it 
turned  it  caused  Holland  and  Italy  to  adopt  insurance  plans.  In  Holland  it  was  a 
State  insurance  plan,  but  with  the  privilege  of  the  employer  to  run  his  own  risk 
provided  he  had  let  the  State  Department  adjust  the  claims,  and  then  would  put 
in  the  hands  of  the  State  Department  the  money  to  pay  them.  It  also  required 
him  to  give  a  satisfactory  bond  so  that  it  was  sure  he  could  provide  it.  In  Italy 
they  had  compulsory  insurance,  but  a  choice  was  given  between  private  companies 
and  mutual  companies  set  up  by  the  State.  In  Sweden  they  introduced  State 
insurance,  but  with  the  privilege  of  insuring  in  stock  or  mutual  companies,  and 
also  the  privilege  of  going  without  insurance  altogether.  The  last  country  to 
take  action  was  Hungary,  which  although  under  the  same  crown  is  not,  as  you 
doubtless  know,  really  a  part  of  the  Austrian  Empire,  or  at  least  not  a  part  of 
Austria,  and  the  insurance  law  of  Austria  did  not  apply  to  Hungary.  The  action 
which  was  taken  in  Hungary  was  to  introduce  a  system  almost  identical  with  that 
of  Germany.     That  is  historically  what  has  taken  place. 

In  some  of  these  countries  the  system  has  not  been  operating  long  enough  to 
know  preceisely  what  is  to  be  expected  from  it.     I  might,  however,  mention  what 
has  taken  place  in  a  few  of  the  smaller  countries  first.     In  Belgium,  where  insur- 
ance is  not  compulsory  and  is  altogether  in  private  companies,  they  have  lost  sa 
much  money  that  it  is  now  probable  that  they  will  have  to  introduce  'State  insur- 
ance as  a  means  of  taking  care  of  it.     In  Holland,  where  private  companies  or 
employers  might  carry  the  risk  provided  they  gave  a  bond  and  did  various  things, 
and  permitted  the  State  Department  to  adjust  the  claims,  the  State  Department 
is  doing  all  the  business.     In  Denmark  they  have  just  decided  to  introduce  State 
insurance,  according  to  my  latest  advices.    In  Sweden  the  !State  Company  is  driv- 
ing the  private  company  out  of  business.     That  is  conceded  by  the  private  com- 
panies themselves,  and  it  is  evident  on  the  face  of  the  returns.     In  Italy,  up  to 
the  present  time  the  situation  has  not  been  satisfactory  and  what  the  result  is 
going  to  be  I  hesitate  to  say.     In  France,  I  do  not  know  of  any  immediate  proba- 
bility that  the  plan  there  in  use  will  be  changed.     The  private  companies  have  not 
found  business  profitable,  and  the  mutual  companies  are  finding  it  necessary  to  in- 
crease their  rates,  and  the  conditions  are  not  altogether  satisfactory.     I  know  lead- 
ing men  in  France,  who  when  that  law  was  put  into  effect  were  very  much  opposed 
to  compulsory  insurance,  are  now  converts  to  it.     Monsieur  Poincare,  who  is  now 
Premier,  and  an  acquaintance  of  mine,  takes  a  very  pronounced  position  about  the 
matter,  and  Monsieur  Millerand,  who  is  a  member  of  his  Cabinet,  and  who  was  the 
author  of  the  old  age  pension  law  of  France,  declared  in  favour  of  compulsory  in- 
surance at  the  conference  in  Rome  some  three  or  four  years  ago.     He  is  also  a 
friend  of  mine  and  I  know  his  attitude,  and  if  any  change  is  made  in  France  that 
will  probably  be  the  change  there.     As  you  are  so  fully  aware  of  what  has  taken 
place  in  Great  Britain  it  is  not  necessary  for  me  to  give  any  special  mention  to  it. 
The  tide  of  opinion  has  greatly  changed  concerning  the  way  in  which  these  matters 
should  be  dealt  with.     The  British  people,  as  short  a  time  ago  as  four  or  five  years, 
were  supposed  to  be  almost  unanimously,  as  far  as  the  influential  classes  were  con- 
cerned, opposed  to  compulsory  insurance,  and  yet  it  has  now  been  introduced  in 
two  very  important  lines,  whether  wisely  on  the  whole  remains  to  be  seen.     Of 
course  nothing  but  experience  will  show.     However,  it  is  noteworthy  about  it  that 


396  MINUTES  OF  EVIDENCE:  No.  65 

the  Conservative  part}',  while  they  are  strongly  disapproving  of  much  that  was 
contained  in  the  Bill,  was  so  convinced  that  some  remedy  of  this  nature  was  re- 
quired that  its  members  preferred  to  let  the  bill  pass  without  either  strenuously 
opposing  it  or  insisting  upon  amendment,  indicating  that  a  great  change  in  the 
opinions  of  the  people  of  England  has  taken  place  relative  to  the  entire  subject- 
Some  things  can  certainly  be  said  about  the  diametrically  opposite  ways  in  which 
the  thing  has  been  done  in  England,  for  instance,  and  in  Germany.  One  of  them 
is  that  on  the  whole  the  way  in  which  it  has  been  done  in  England  has  proved 
unsatisfactory.  It  would  not  be  necessary  to  name  a  single  man  who  says  that; 
it  is  almost  universally  the  opinion  there.  The  Trades  Union  Congress,  for  in- 
stance, has  condemned  the  present  system  in  Great  Britain,  and  I  think  at  every 
single  session  since  1897  has  called  for  the  introduction  of  compulsory  insurance, 
and  a  very  large  proportion  of  the  British  employers  are  of  the  same  opinion.  The 
highest  authority  on  the  subject  from  the  technical  standpoint  in  Great  Britain 
is  Mr.  Henry  AVolfe,  and  his  opinion  has  for  a  long  time  been  pronouncedly  the 
same.  On  the  other  hand,  in  Germany,  with  -only  the  occasional  exceptions  of 
some  person  who  from  the  mere  fact  that  he  does  speak  makes  him  prominent 
as  being  so  much  against  the  chorus,  the  entire  sentiment  of  all  the  people  is 
that  the  plan  has  worked  well,  and  the  only  changes  that  are  being  proposed  in 
it  are  with  reference  to  its  extension  to  solve  other  problems,  and  assist  the  people 
and  the  Government  in  bringing  about  better  conditions  for  the  German  in- 
dustries in  which  the  country  is  always  so  much  interested.  To  the  criticisms  that 
are  brought  against  the  British  system  as  in  actual  operation  I  shall  be  glad  to 
call  your  attention,  but  first  I  should  like  to  mention  the  things  which  are  gene- 
rally brought  forward  as  those  which  have  certainly  been  accomplished  under  the 
German  system.  In  the  first  place,  it  is  said  of  it  that  it  does  the  work — it  really 
does  the  work.  I  have  said  the  Trades-Union  Congress  of  Great  Britain  sent  re-~ 
presentatives  over  to  look  into  the  matter  on  the  ground  in  Germany,  and  here  is 
one  sentence  out  of  their  report:  "The  absence  of  slums  in  the  manufacturing 
quarters  of  the  towns  visited,  and  elsewhere,  was  also  noticeable.  It  can  be  said 
that  nowhere  did  the  deputation  see  any  quarter  that  could  be  classified  under 
the  heading  slum."  They  started  with  some  prejudice  against  the  general  idea, 
but  they  returned  very  much  in  favor  of  it.  The  second  great  recommendation 
was  it  started  without  any  great  strain  upon  the  industries.  This  was  due,  as  I 
have  stated,  to  the  industries  being  taxed  only  enough  money  to  meet  the  money 
requirements.  Perhaps  your  Lordship  will  remember  that  I  promised  I  would 
mention  one  departure  from  that.  They  collect  a  small  reserve  in  Germany  in 
the  form  of  a  surcharge  upon  the  regular  assessment.  This  reserve  is  not  collected 
for  the  purpose  of  providing,  in  the  present  at  all  events,  for  future  sums  pay- 
able. It  i-  collected  with  the  view  that  if  there  should  be  a  war  or  great  depres- 
sion of  industry  for  a  lime  so  that  the  pay-rolls  of  employees  became  greatly  re- 
duced, under  those  circumstances  under  the  German  system,  with  the  amount 
that  should  be  paid  for  workmen's  Compensation  depending  on  the  year's  work. 
but  arising  oui  of  all  the  years  prior  thereto,  it  might  be  necessary  to  collect  a 
considerable  increase  in  the  regular  rate  of  assessment,  and  the  German  reserves 
are  maintained  for  the  purpose  of  taking  care  of  thai  situation  if  it  arises. 
Another  thing  thai  has  made  it  very  successful  is,  as  I  have  stated,  that  it  with- 
draws the  minimum  of  capital  from  the  nation's  industries.  This  looks  very 
small,  your  Lordship,  when  we  deal  with  it  as  percentages.  For  instance,  you 
take  the  rates   which   arc  charged    for  workmen's  compensation   insurance,  and   it 


1912  WOKKMEN'S  COMPENSATION   COMMISSION.  :\\rt 

does  not  look  like  a  big  thing  at  all,  hut  it  would  have  been   literally  hundreds  of 
millions  of  marks  tied  up  in  relatively  non-productive  investments  at   low  rates  of 
interest,  and   actually   withdrawn    from    the  active   industries  of  Germany,  and   it 
might  have  made  a  very  great  difference  to  Germany  in  their  race  for  the  world's 
supremacy  in  the  markets.     In  fact,  I  think  I  can  say  it  would  have  made  a  great 
ileal  of  difference,  because  Germany  has  never  had   more  capital   than  she  needed. 
You   remember  at  the  time  of  the  late  unpleasantness  what  is  supposed  to  have 
brought  a  halt  in  Germany  was  want  of  money,  and  had  she  crippled   her  indus- 
tries \iy  tying  up  funds  in  the  manner  I  speak  of  she  might   not   have  assumed  the 
important  place  in  the  world's  markets  that  she  has.     Another  feature  of  that  is 
it  is  managed  by  the  contributors  and  they  are  therefore  self-convinced,  and  there- 
fore content.     In  my  opinion  absolutely  the  best  method  of  control  and   manage- 
ment of  these  funds  is  that  the  persons  who  are  paying  in  the  money  should  have 
as  large  a  measure  of  control   over  them  as  practicable.     Another  feature  of  the 
German  plan   is   its   being   so   economically  conducted.     It   costs,   including   what 
they  spend  for  prevention,  which  is  a  very  considerablee  amount,  only  14  1-10  per 
cent,  to  manage  the  fund.     This,  however,  is  equalled  by  the  State  system  in  Nor- 
way where  the  cost  is  only  11  per  cent.,  but  no  part  of  that  is  used  for  prevention. 
Another  feature  that  they  are  very  well  satisfied  about  is  it  greatly  encouraged 
prevention.     Xow,  it  may  seem  at  first  blush  you  could  not  get  a  better  way  of 
encouraging  prevention  than  to  hold  the  employer  distinctly  and  directly  liable, 
and  there  is  something  in  that  as  applied  to  the  large  employers  where  you  can 
get  an  average,  but  the  small  employer,  to  him  it  is  only  a  risk,  it  is  not  a  cer- 
tainty, and  he  ascribes  necessarily  the  whole  thing  to  luck,  and  experience  has 
shown  that  it  does  not  greatly  encourage  prevention  unless  it  is  operated  through 
some  insurance  system  where  want  of  care  on  his  part,  and  want  of  keeping  up 
proper   safety   appliances,   and   so   on,    results    in    an    increase    in    his   premiums. 
Another  feature  which  has  done  a  great  deal  of  good  is  this,  and  it  is  laid  great 
stress  on  in  Germany :  it  has  greatly  increased  the  efficiency  of  the  German  work- 
man.    iSTow,  your  Lordship,  I  am  sure  you  can  remember,  as  I  can,  a  time  not 
veiy  long  ago,  a  quarter  of  a  century  or  a  little  over,  when  it  would  have  been  a  matter 
of  absolute  amusement  to  us,  or  to  either  of  us,  if  anybody  had  affirmed  that  the 
German  workman  on  the  whole  was  more  efficient  than  the  British,  and  yet  that 
is  not  affirmed  now  only  in  Germany,  but  it  is  affirmed  in  Great  Britain  ;  and  the 
thing  which  is  the  most  surprising  is  the  German  employers  ascribe  it  very  largely 
to  this  system.     I  take  it  it  is  the  moral  effect  of  it.     The  German  workman  who 
does  his  work  right,  and  who  does  not  do  something  criminal,  or  quasi-criminal, 
is  assured  of  support  for  himself  and  for  his  family  whenever  such  misfortunes 
fall  upon  him.  and  it  has  had  a  tremendous  moral  effect.     Another  thing,  too,  under 
the  German  system  there  is  a  considerable  amount   of  co-operation  between  the 
employer   and   employee   in   the   carrying   out   of   the   plan,   and    that    has   had   a 
tremendous  moral  effect-     In  any  event,  it  has  been  decided  by  the  German  manu- 
facturers and  the  German  employers  generally  that  such  is  the  case.     In  addition, 
it  is  also  attested  by  them  that  it  has  been  a  very  large  element   in  the  great  in- 
dustrial  advance  of  that   country.      For   instance.   Dr.   Kaufmann,   the   President 
of  the  Imperial  Insurance  Department,  said  at  the  35th  anniversary  of  the   in- 
auguration of  the  German  system,  "  It  was  no  accident   that  the  period  of  this 
great  expansion  synchronized  with  a  radical  improvement  in  the  condition  of  the 
workers,   for  the   two   are   intimately   connected.      Unquestionably   a   contributory 
cause  of  our  growing  industrial  pre-eminence  may  be  seen  in  the  successful  treat- 


398  MINUTES  OF  EVIDENCE:  No.  65 

ment  of  social  questions,  and  particularly  that  of  workmen's  insurance."  Then 
Dr.  Zacher,  who  is  the  highest  authority  on  the  subject  in  the  world,  also  said  at 
the  same  meeting,  "AH  these  facts  warrant  us  in  affirming  that,  far  from  tram- 
melling, workmen's  insurance  has  been  one  of  the  principal  factors  in  the  un- 
paralleled advancement  of  Germany." 

Now,  the  other  system,  I  am  sorry  to  say,  because  I  am  a  great  admirer  of 
the  British — I  spring  from  British  ancestry  myself  and  I  am  proud  of  the  an- 
cestry and  the  country  from  which  my  people  came — is  not  satisfactory.  We  call 
it  British  just  because  it  happens  to  have  been  Britain  where  this  particular 
method  was  first  introduced.  Now,  one  of  the  objections  to  it,  and  I  think  the 
worst  objection,  is  that  it  really  does  not  do  the  work.  Here,  for  instance,  is  a 
quotation  from  the  Policy  Holder,  published  in  the  interests  of  the  private  in- 
surance companies  in  Manchester,  England.  "  We  must  say  that  if  anything  is 
likely  to  provoke  the  State  to  start  compensation  insurance,  it  is  the  action  of 
many  offices  in  '  bluffing '  claimants  into  unjust  settlements.  Almost  every  day 
we  notice  in  some  part  of  the  country  the  intervention  of  the  County  Court  to 
prevent  the  registration  of  'some  agreement  which  is  manifestly  unfair."  Then 
there  is  an  omission,  and  then  goes  on:  "To-day  they  often  trade  upon  the  ignor- 
ance of  claimants  when  they  should  be  collecting  higher  premium  rates.  This 
naturally  arouses  the  anger  of  all  right-minded  persons,  and  it  certainly  gives 
those  members  of  the  community  who  are  inclined  towards  socialism  an  oppor- 
tunity to  plead  for  the  nationalization  of  all  the  means  of  production,  distribution 
and  exchange.  If  the  insurance  offices  serve  the  public  well  they  have  nothing 
to  fear,  but  shaving  claims  to  swell  the  dividend  returns  is  not  good  service." 
Then  here  is  a  little  account  of  something  that  took  place  in  a  court  in  England, 
published  also  in  another  insurance  paper,  the  Insurance  Observer,  a  paper 
published  in  the  interests  of  the  private  insurance  companies  in  London.  "  Judge 
Emden  said  that  he  did  not  approve  at  all  of  those  lump  sums.  They  were  getting 
far  too  frequent.  He  believed  that  he  was  correct  in  saying  that  now  the  larger 
portion  of  the  work  under  the  Workmen's  Compensation  Act  was  being  trans- 
acted under  agreements  of  that  character  and  the  object  of  the  Act  was  being 
defeated.  If  the  case  before  him  was,  as  was  alleged,  an  improper  case  to  bring, 
it  was  not  a  case  for  an  agreement  at  all,  and  ought  to  be  dismissed.  If  it  was 
a  proper  case,  then  an  agreement  was  not  the  right  way  to  dispose  of  it,  and  he 
did  not  think  the  workman  would  be  properly  protected  unless  the  matter  came 
before  the  court.  He  had  been  watching  those  cases  for  some  time,  and  his  con- 
clusion, based  upon  investigation,  was  that  the  whole  beneficial  effect  of  the  Act 
was  being  defeated." 

In  that  connection  I  might  call  your  Lordship's  attention  to  the  original  con- 
ditions which  caused  this  legislation  to  come  into  existence,  that  it  was  merely 
the  community  in  one  sense  dealing  with  the  community  in  another  sense,  and  the 
machinery  was  through  taxation  upon  the  industry  in  order  that  it  might  be  fair. 
The  difficulty  about  it  when  the  private  company  is  thus  interposed  is  the  private 
company  simply  wants  to  get  a  settlement  and  get  out  of  it.  Now,  the  community 
wants  that  widow,  those  children,  or  that  disabled  workman,  whatever  the  cace 
may  be,  supported  during  this  disability  under  these  conditions.  It  wishes  to  take 
a  burden  off  its  own  shoulders,  not  merely  to  provide  that  family  with  a  lump 
sum,  for  instance,  or  something  like  that,  which  they  may  spend  in  six  weeks  or 
six  months,   and    then    he   on    the   community   again.        Another    difficulty   about 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  399 


the  British  system  was  that  it  started  with  a  maximum  strain  on  the  British  in- 
dustries, not  a  minimum.     It  may  be  it  is  only  coincidence — I  would  not  care  to 
blame  it  on  this  system  as  being  the  only  cause,  or  even  the  chief  cause,  your 
Lordship,  that  this  thing  should  have  taken  that  course — that  on  the  whole  rela- 
tively in  the  world's  market  British  industry  has  fallen  back  during  the  last  fif- 
teen years,  while  Germany  has  gone  forward;  but  these  ^are  significant  notwith- 
standing, taking  into  account  the  very  close  margin  on  which  the  world's  markets 
are   handled,   and   which   especially   British   employers   and   manufacturers   have 
always  dealt  in.     Here  is  a  specimen :  "A  blast  furnace  in  Great  Britain,  prior  to 
the   adoption  of  the   1897   Act,  was   paying  from   10   cents   to   20   cents   insur- 
ance rate  on  $100  of  pay-roll.     After  the  adoption  of  the  act  they  paid  $1.50  om. 
$100  of  pay-roll.     I  have  used  dollars  because  that  is  familiar  to  us,  instead  of 
pounds  and  pence.       A  nail  factory  which  had  previously  been  paying  from  10 
cents  to  20  cents  on  $100  of  pay-roll  was  required  to  pay  $1.25.     A  rolling  mill, 
and  that  is  one  of  the  greatest  of  British  industries,  which  had  previously  been 
p'aying  from  10  cents  to  20  cents,  was  required  to  pay  from  $1.50  to  $1.871/4. 
A  tannery,  one  of  the  great  industries  of  Great  Britain,  the  tanning  of  hides  and 
manufacturing  of  leather,  previously  paid  10  cents  on  $100  of  pay-roll,  and  was 
required  to  pay  $1.25.     Those  changes  almost  as  they  stand  there  were  super- 
imposed upon  the  British  industries  immediate^  with  no  chance  to  adjust  them- 
selves to  them,  or  anything  else.     There  is  the  same  illustration  here  in  Canada. 
Several  of  your  Provinces  have  already  adopted  Workmen's  Compensation  Acts. 
One  of  them  is  the  Province  of  Quebec,  and  one  the  Province  of  British  Columbia. 
There  have  been  several  since  that  time,  but  I  haven't  the  rates  for  those  Provinces. 
In  the  Province  of  Quebec  the  rate  for  a  nail  factory  prior  to  the  passage  of  the 
Quebec  Act  was  42  cents  on  $100  of  pay-roll,  and  it  became  immediately  $2.40, 
six  times  as  much.     On  a  rolling  mill  it  was  52  cents  on  $100  of  pay-roll,  and  it 
immediately  became  $3.61,  nine  times  as  much.     Now,  those  are  exceedingly  im- 
portant differences,  and  the   differences  in  other  lines  are  similar.     We  had  a 
similar  experience  in  New  York  when  we  passed  our  law.     I  have  investigated 
what  the  change  was  that  took  place  in  New  Jersey  after  they  passed  their  law, 
and  to-day  several   industries   in   the  city   of   Camden,   just   across  from   Phila- 
delphia, are  paying  ten  times  the  rate  for  workmen's  compensation  insurance  that 
it  is  necessary  to  pay  in  Philadelphia,  in  the  State  of  Pennsylvania,  for  Employers' 
Liability  Insurance  in  some  industries.    You  can  easily  see  that  is  a  serious  handi- 
cap to  a  New  Jersey  industry,  and  in  the  world's  markets  such  things  are  handi- 
caps.    Another  thing  has  been  that  it  has  withdrawn  a  maximum  amount  of 
capital  from  the  nation's  industries.    It  did  this  on  account  of  a  capitalized  value 
system  of  setting  up  reserves  in  private  companies,  and  also  on  account  of  the 
forcing  of  the  purchase  of  Government  annuities.     Wherever  the  company  wished 
to  get  out  of  the  risk  or  get  out  of  the  payment  it  would  pnt  up  a  lump  sum  to 
be   invested   in   the   purchase  of   Government   annuities,   or  else   it  would  be   de- 
posited with  a  trust  Company,  and  in  that  way  a  great  deal  of  money  that  did 
not  need  to  be  used  at  that  time  has  been  withdrawn  from  the  industries  of  the 
country.     Another  harm  that  it  has  done  is  that  there  has  been'no  personal  touch 
between  the  employer  and  his  injured  employee,  or  between  the  employers  as  a 
class  and  their  injured  employees,  and  consequently  they  are  eternally  criticizing 
the  companies  without  really  suggesting  any  remedy.     Then,  again,  it  has  proved 
very  expensive.     The  avowed  expenses  are  36  per  cent,  as  compared  with  14  per 
cent,  in  Germany.     The  actual  expense,  however,  is  larger  because  in  the  pub- 


400  MINUTES  OF  EVIDENCE:  No.  65 

lished  report  of  expenses  of  the  British  companies  they  do  not  include  the  money 
paid  for  litigation  or  in  the  adjustment  of  claims,  and  the  estimate  of  those  who 
are  really  expert  in  it  is  that  the  real  expense  is  ahout  50  per  cent.,  about  the  same 
as  in  Canada  and  the  United  States.  In  the  United  States  there  is  51  per  cent. 
of  the  premiums  absorbed  for  expenses.  Another  thing  that  has  come  out  of  it  is 
that  it  does  not  encourage  prevention.  There  is  not  even  a  pretence  anywhere  in 
Great  Britain  that  anything  has  been  accomplished  in  the  matter  of  encouraging 
prevention  in  this  way.  It  has  been  given  on  the  authority  of  persons  whose  know- 
ledge of  the  matter  is  very  complete,  such  as  the  recent  Boyal  Commission  that 
investigated  it,  that  there  is  not  any  evidence  whatever  that  it  has  encouraged 
prevention,  and  there  is  considerable  evidence  to  the  contrary.  It  has  not  in- 
creased the  efficiency  of  the  British  workman.  I  am  not  going,  to  spend  time  on 
that.  Your  Lordship  is,  I  know,  fully  aware  of  the  nature  and  extent  of  the 
problem  in  Great  Britain  of  bringing  about  an  increase  of  the  efficiency.  Less 
than  twenty-five  years  ago  no  workman  in  the  world  was  considered  the  ecpial  of  the 
British  workman,  and  I  am  sure  that  that  condition  will  be  created  again.  The 
average  to-day  is  high,  but  in  some  other  countries,  and  very  particularly  in  Ger- 
many, in  a  way  that  is  attributed  to  the  superiority  of  their  way  of  dealing  with 
this  thing,  the  achievements  in  Great  Britain  in  the  matter  of  efficiency  have  been 
reached  and  passed.  I  would  like  to  mention  one  thing,  though,  to  your  Lord- 
ship which  I  think  is  really  very  interesting.  Under  the  system  there  of  holding 
the  employer  directly  liable  and  permitting  insurance  to  be  carried  with  private 
companies  two  things  have  arisen,  one  of  which  is  practically  openly  avowed  by 
the  companies,  and  the  other  exists  although  not  avowed.  The  first  of  these  that  is 
avowed  is  that  wherever  they  are  competing  very  closely  as  to  rates  they  make 
arrangements  with  the  employer  so  that  persons  are  not  employed  who  are  beyond 
a  certain  age,  and  in  letting  older  employees  go.  Those  who  are  beyond  that  age 
are  permitted  to  go,  and  a  preference  is  given  to  the  younger  employees.  This,  of 
course  is  a  very  serious  situation,  in  view  of  the  fact  that  it  tends  to  throw  men 
out  of  employment  at  advanced  ages,  and  one  of  the  reasons  that  the  British  Gov- 
ernment felt  it  right  to  deal  with  the  question  in  so  serious  a  way  was  because  if 
a  man  had  reached  a  certain  age  and  got  out  of  employment  he  did  not  get  back 
again,  in  some  lines  of  trade  at  least.  Now,  that  is  not  denied  at  all,  but  there 
is  another  thing  taking  place  which  is  not  so  openly  avowed,  but  which  has  un- 
questionably taken  place  notwithstanding,  and  that  is  that  a  preference  is  given 
to  unmarried  workmen.  If  the  unmarried  workman  is  killed  at  his  work  the 
amount  that  is  paid  is  simply  a  benefit,  and  the  company  can  get  out  of  it  cheaper 
if  a  larger  proportion  of  the  workmen  is  not  married.  It  may  occur  to  you 
immediately  that  that  happens  the  same  with  any  kind  of  system,  for  instance, 
willi  a  State  insurance  system,  but  the  difference  is  the  State  is  not  interested  in 
competing  with  somebody  else  as  to  rates.  The  State  is  interested,  on  the  other 
hand,  in  having  all  its  people  who  are  capable  of  labour  profitably  employed,  so 
there  is  not  any  financial  inducement  for  the  State  insurance  system  to  behave 
in  that  manner,  nor  really  any  opportunity  at  all.  Tt  is  said  that  the  failure  of 
Greal  Britain  to  advance  her  foreign  trade  as  rapidly  in  proportion  as  Germany  is 
to  a  considerable  extent  due  to  this  condition,  resting  partly  upon  the  falling  back 
in  efficiency,  partly  upon  the  withdrawal  of  capital  which  should  he  in  industry, 
.Mid  partly  upon  other  causes  growing  out  of  the  system.  I  rather  think,  your 
Lordship,  that  there  is  (me  clement  of  that  that  is  more  powerful  than  any  of 
the  things   I   have  mentioned,  and   that    is  thai    while  they  have  admirable  trade 


1912     •        WORKMEN'S  COMPENSATION   COMMISSION.  401 

unions  in  England  and  haw  done  a  greal  dea]  of  good  work,  and  arc  established 
in  better  shape  perhaps  than  the  trade-unions  on  this  continenl  for  doing  good 
work,  they  haw  almost  no  established  do-ordination  and  co-operation  between  the 
employers  and  employees  through  these  associations.  On  the  other  hand, 
the  German  employees  are  quite  accustomed  to  business  negotiations  with  their 
employers  or  representatives  of  employers  relative  to  the  insurance  system,  and  I 
am  told  in  Germany  that  they  Consider  that  thai  has  been  a  large  elemeni  in  pre- 
serving peace  there,  and  thereby  increasing  the  chances  of  Germany  in  the  world's 
markets. 

Your  Lordship  will  remember,  I  am  sure,  an  issue  that  was  raised  in  England 
not  long  ago  about  the  increasing  difficulty  of  obtaining-  for  the  army  men  who 
measured  up  physically  and  otherwise,  and  the  complaint  that  there  were  signs 
of  actual  degeneracy  in  that  respect,  and  I  thought  I  would  like  to  read  to  you 
.something  that  Dr.  Zacher,  whom  I  have  already  mentioned  as  the  greatest 
authority  on  this  subject  in  the  world,  says  about  this  in  Germany,  "  According  to 
recent  data  (and  he  names  the  data)  the  average  duration  of  life  rose  from  38.1 
years  in  1870  to  -18.85  in  1900  far  men,  and  from  42.5  to  54.9  for  women;  the 
general  death  rate  sensibly  diminished  and  the  mortality  due  to  tuberculosis  has 
been  reduced  to  about  half  what  it  wras  formerly,  so  much  so  that  one  can  hope  to 
see  the  scourge  which  decimates  the  people  soon  completely  vanquished,  a  hope 
which  could  scarcely  be  realized  without  the  powerful  organization  of  workingmen's 
insurance.  For  this  by  curative  and  preventive  measures  brings  every  year  pros- 
perity into  millions  of  working  families,  and  thus  not  only  conserves  numerous 
forces  for  the  nation,  but  even  augments,  by  the  hygienic  education  which  it  gives 
them,  the  vital  force  of  great  masses  of  population.  That  explains  why  the  oper- 
ations of  recruiting  despite  the  growing  industrialisation  of  Germany  indicate  a 
constant  improvement  of  the  number  of  men  called  to  perform  their  service  and 
of  their  physical  development." 

If  there  were  no  other  reason  why  such  a  method  would  be  preferable,  and  if 
that  reason  he  valid  and  correctly  stated,  I  should  say  it  would  be  entirely 
sufficient,  and  it  is  because  of  those  things  I  have  personally  formed  the  conclusion 
sometime  ago  that  on  principle  as  between  these  two  methods  undoubtedly  the 
insurance  method  is  preferable.  I  am  afraid  I  have  given  a  rather  long  answer 
to  the  question,  but  I  hope  it  may  be  useful. 

Mr.  Wegenast  :  I  just  wanted  the  historical  story  as  a  basis.  What  do  you 
consider  the  real  basic  difference  between  the  British  and  the  German  systems, 
speaking  of  tihem  in  those  terms? 

Mr.  Dawson  :  Fundamentally  the  difference  is  between  conceiving  this  as  a 
method  of  causing  the  consumer  of  products  or  services  to  include  in  the  price  which 
he  pays  for  them  provision  for  the  same  consumers  as  producers  against  accidents, 
and  the  system  which  primarily  conceives  of  it  as  causing  the  employer  to  pay  it 
as  an  employer  to  the  employee. 

Mr.  Wegenast:  Is  that  not  more  a  difference  in  the  method' of  attaining  the 
same  result? 

Mr.  Dawson  :  The  result  of  that  difference  in  conception  is  that  in  England 
they  have  held  the  employer  directly  liable.  In  case  he  does  not  insure  and  the 
accident  happens  he  himself  must  pay  it.  and  in  fact  he  must  do  so  in  any  event 
if  the  insurance  company  should  fail,  while  in  Germany  they  hold  the  State  liable 
virtually  and  compel  the  employers  to  pay  taxes,  raising  a  sufficient  fund  out  of 
which  to  pay  all  such  compensation.  It  also  fundamentally  differs  in  this  that 
under  the  British  system  where  there  is  insurance  it  necessarily  results  that  the 
26  l. 


402  MINUTES  OF  EVIDENCE:  No.  65 


insurance  company  must  put  up  a  reserve  sufficient  to  take  care  of  future  payments 
on  account  of  the  accident  that  has  happened,  and  therefore  must  charge  a  premium 
accordingly,  or  it  must  pay  a  lump  sum,  if  it  can  get  an  adjustment  on  a  lump  sum 
payment,  or  it  must  pay  the  money  over  to  a  trustee,  or  else  must  buy  an  annuity 
from  the  Government  for  an  employee,  and  in  any  one  of  those  cases  the  lump  sum 
must  be  raised  and  the  rate  of  insurance  grow,  while  under  the  German  system 
they  only  collect  enough  from  year  to  year  to  meet  the  requirements  of  the  year. 
Possibly  it  would  interest  your  Lordship  to  learn  how  they  arrange  about  those 
collections  in  Germany.  In  Germany  the  Postal  Savings  Banks  advance  all  the 
money  necessary  to  pay  all  the  claims  during  the  year,  and  those  advances  are  made 
to  the  different  funds  out  of  which  the  payments  are  to  be  made  as  required.  The 
Savings  Banks  of  course  charge  interest  upon  the  aggregate  amount.  At  the  end  of 
the  year,  after  it  is  definitely  known  just  how  many  marks  were  required  to  be 
paid,  the  insurance  authorities  divide  up  the  amount  into  assessments  upon  the 
individual  employers.  They  say  it  works  very  simply.  There  is  no  guess  work 
about  it.     It  is  a  post  mortem  assessment. 

Mr.  Wegenast:  The  assessment  is  made  after  the  amount  required  is  defi- 
nitely ascertained? 

Mr.  Dawson  :    Yes. 

Mr.  Wegenast:  Now,  you  have  spoken  of  the  social  insurance  systems  of 
Germany  which  consist  of  four  different  types  of  insurance,  but  on  the  basis  of  a 
workmen's  compensation  system  alone,  a  system  which  would  compensate  workmen 
simply  for  the  results  of  accidents  happening  in  connection  with  industrial  occupa- 
tions, what  would  you  say  as  to  the  relative  merits  of  the  individual  liability  system 
such  as  that  represented  in  England,  and  the  collective  liability  system  such  as 
represented  in  Germany? 

Mr.  Dawson  :  Unquestionably  the  system  of  treating  this  as  a  public  matter 
and  assessing  all  employers  their  fair  share  of  the  cost  of  it,  instead  of  imposing 
an  individual  liability  upon  the  employer,  has  worked  best  everywhere  and  is  best 
in  every  respect. 

Mr.  Wegenast  :  I  was  not  thinking  of  it  so  much  in  the  sense  of  a  State 
function,  but  in  the  sense  of  simply  a  large  collective  system.  Suppose  you  could, 
without  the  intervention  of  the  State,  establish  a  system  in  which  all  employers  in, 
we  will  say.  one  certain  industry  were  assessed  on  the  basis  of  the  hazard  of  the 
industry — how  would  a  system  of  that  kind  compare  in  efficiency  with  a  system 
where  the  liability  is  thrown  on  the  individual  employer? 

Mr.  Dawson  :  I  should  expect  it  to  be  very  much  more  efficient  and  much 
more  economical.  The  German  is  a  system  such  as  you  describe.  That  is  to  say, 
in  Germany  they  divide  the  employers  of  the  country  into  classes  according  to 
their  industry.  All  the  metal  trades  would  be  in  one  class,  for  instance,  and  so  on. 
All  the  drug  and  chemical  trades  would  be  in  another,  and  it  is  generally  thought 
that  has  worked  even  better  than  the  State  insurance  system  in  Norway,  for 
instance,  especially  in  the  matter  of  encouraging  prevention. 

Mr.  Wegenast:  You  would  p-efer  then  classifyi  lg  the  risks  according  to 
the  industry  rnlher  than  according  to  the  hazard? 

Mr.  Dawson:  Oh,  undoubtedly.  For  one  reason,  because  the  people  engaged 
in  related  industries  understand  one  another's  hazards,  and  would  be  able  to  give 
far  more  guidance  in  the  matter  of  prevention.  I  think  it  is  an  immensely  better 
system. 

Mr.  Wegenast:  Of  course  you  are  familiar  with  conditions  in  this  country 
and  in  the  United  States.     There  are  of  course  no  institutions  in  this  country 


1912  WOKKMEN'S  COMPENSATION   COMMISSION.  iU3 

corresponding  to  those  upon   which  Bismarck  founded  his  compensation  system, 
namely,  the  voluntary  employers'  associations? 

Mi;.  Dawson:  There  weren't  very  many  of  them,  even  in  Germany.  There 
were  some. 

Mr.  Wegenast:     How  many,  approximately? 

Mr.  Dawson:  I  could  not  give  you  the  number,  but  it  was  few.  There  was, 
however,  quite  a  development  of  private  mutual  sickness  insurance  associations, 
and  really  they  based  their  system  as  much  on  that  as  anything  else.  The  first 
development  in  Germany  was  to  broaden  the  sickness  insurance  association.. 

Mr.  Wegenast  :  Do  you  see  any  difficulty  under  the  conditions  here,  and  of 
course  you  are  operating  under  the  same  conditions,  and  coping  with  them,  in  the 
United  States,  in  working  out  a  system  similar  to  that  of  Germany,  without  having 
these  employers'  associations? 

Mr.  Dawson  :  Well,  it  would  not  be  similar  to  that  of  Germany  in  the  strict 
sense  of  the  word  "  similar,"  because  it  would  not  be  like  it,  but  a  system  of  State 
insurance  under  which  no  more  was  collected  than  would  be  required  from  year  to 
year,  except  an  amount  for  the  establishment  of  the  contingency  reserve  that  I 
spoke  of,  would  be  very  closely  similar  to  it.  It  would  not  be  the  same  thing,  of 
course. 

Mr.  "Wegenast:  Aren't  the  essential  principles  of  the  acts  of  the  State  of 
Washington,  and  Ohio,  and  Massachusetts  similar  to  the  German. 

Mr.  Dawson  :  The  Act  of  the  State  of  Massachusetts  is  very  similar  because 
it  does  recognize  a  classification  of  industries  and  separate  associations,  as  I  recall 
it.  I  am  not  quite  sure  about  that,  but  I  think  so.  I  know  there  was  in  the 
original  suggestion.  In  any  event  it  is  very  similar  to  it  because  the  employers  are 
to  have  the  management  of  the  Association.  In  the  other  two  States  it  is  a  State 
insurance  plan  under  which  the  State  authorities  operate  it,  but  in  other  respects 
it  is  very  similar. 

Mr.  Wegenast  :  I  asked  Mr.  Boyd,  who  was  here  the  other  day,  this  question, 
whether  in  his  opinion  the  result  of  classification  of  the  employers  of  industries 
would  be  to  raise  something  similar  to  the  associations  in  Germany.  What  do  you 
say  as  to  that,  Mr.  Dawson? 

Mr.  Dawson  :  If  it  were  undertaken  on  a  national  scale  in  Canada  or  the 
United  States  it  would.     It  might  in  a  great  State  like  New  York  in  any  event. 

Mr.  Wegenast:  What  I  am  thinking  of,  Mr.  Dawson,  is  this.  Suppose  the 
employers  in  the  Province  of  Ontario,  say  the  employers  in  the  woodworking  indus- 
tries, were  placed  in  a  class,  and  that  class  made  to  bear  the  hazard  of  its  industries? 
What  I  had  in  view  was  there  would  be  some  way  found  whereby  those  employers 
would  combine  to  undertake  activities  in  the  direction  of  accident  prevention,  and 
perhaps  in  other  directions,  without  being  compelled  by  the  Government  to  form 
an  association  as  they  are  in  Germany?     What  do  you  say  as  to  that? 

Mr.  Dawson:  Well,  I  fear  I  would  only  be  hazarding  a  guess,  and  I  am 
inclined  to  think  you  could  answer  it  better  than  I  could  because  of  your  position 
in  the  Manufacturers'  Association.  I  am  not  certain  that  it  would  in  all  cases  or  in 
nearly  all  result  in  that,  and  yet  I  can  see  that  it  would  in  some  cases  if  it  was 
intelligently  directed.  If  these  same  manufacturers  had  any  disposition  to  associate 
in  some  other  respect,  or  some  other  way.  I  can  quite  see  that  this  would  give  an 
impetus  to  their  giving  attention  to  this  also. 

Mr.  Wegenast:  You  have  spoken  of  the  compulsory  insurance  system,  or 
as  I  call  it  the  collective  liability  system,  as  tending  to  a  greater  degree  to  prevent 
accidents.     How  do  vou  consider  it  has  that  effect? 


404  MINUTES  OF  EVIDENCE:  No.  65 


Mr.  Dawson  :  It  has  had  that  effect  in  Germany  very  markedly  and  it  is 
attributed  to  the  fact  that  first  of  all  it  is  a  pure  assessment  system,  and  if  through 
failure  to  take  proper  precautions  there  is  a  heavy  burden  thrown  on  the  fund  in 
a  given  year  the  result  of  it  will  appear  in  larger  assessments  at  the  end  of  that 
very  year  so  that  there  is  no  escaping  it. 

Mr.  Wegenast:  So  it  is  brought  directly  home  on  the  start,  and  not  spread 
over  a  number  of  years  as  in  the  insurance  companies. 

Mr.  Dawson  :  Another  reason  is  they  themselves  or  their  representatives 
manage  the  fund.  They  have  the  right  also  to  make  rates  for  the  different  in- 
dustries that  are  in  the  association,  and  they  penalize  strongly  the  failure  to  put 
in  proper  preventive  measures.  Then  again  it  has  given  a  great  impetus  to  the 
study  of  preventive  measures.  A  very  large  proportion  of  the  failure  of  pre- 
vention, your  Lordship,  is  due  not  to  any  disinclination,  hut  simply  to  the  want  of 
knowledge.  As  a  result  of  the  German  system  they  have  developed  the  invention 
of  methods  of  prevention  to  a  degree  that  previously  would  have  been  deemed 
absolutely  incredible.  Persons  connected  with  these  mutual  funds  have  that  on 
their  minds,  and  their  conscience  is  charged  with  it,  and  they  are  thinking  out  ways 
in  which  these  things  can  be  accomplished. 

Mr.  Wegenast:  Would  you  expect  that  result  to  follow  in  the  case  of  an 
Act  like  the  State  of  Ohio  or  the  State  of  Washington  where  they  make  classes? 

Mr.  Dawson  :  I  could  not  say  certainly  what  I  expect  from  either  Ohio  or 
Washington,  except  I  do  expect  it  will  be  helpful  towards  efficiency  in  a  broad  way, 
but  when  I  come  to  reason  by  analogy  I  have  to  put  those  into  a  class  with  Austria 
and  Norway  for  the  reason  that  the  whole  thing  is  to  be  conducted  by  appointees 
of  the  Government,  and  therefore  I  do  not  know  certainly  that  there  will  be  any 
great  impetus  directly  given  to  prevention. 

Mr.  Wegenast:  Your  idea  then,  Mr.  Dawson,  is  that  the  chief  inducement 
towards  prevention  arises  out  of  the  employers  themselves  being  called  upon  to 
administer. 

Mr.  Dawson:  Directly  participate  at  least  in  the  administration.  It  does  to 
a  large  extent,  and  especially  where  they  are  participating  in  the  administration  of 
an  association  of  allied  industries,  the  general  nature  of  which  every  man  that  goes 
there  as  a  representative  is  fully  acquainted  with. 

Mr.  Wegenast:  So  that  is  a  desirable  feature  to  have  incorporated  in  a 
workmen's  compensation  system? 

Mr.  Dawson  :  I  personally  think  it  is.  I  realize  the  difficulty  of  incorporat- 
ing it  in  a  system  which  applies  only  to  a  single  Province  in  Canada,  or  a  single 
State  in  the  United  States,  but  if  it  were  possible  for  you  in  Canada,  as  far  as  T 
know  the  situation  here — I  do  not  claim  to  know  it  well — or  for  us  in  the  United 
States  to  do  the  thing  nationally,  that  is  the  way  I  think  it  should  be  done. 

Mr.  Wegenast:  I  do  not  wish  to  monopolize  Mr.  Dawson's  time,  your 
Lordship. 

The  Commissioner  :  You  have  opened  one  branch  of  it,  and  I  suppose  Mr. 
Dawson  has  told  us  all  he  thinks  is  important  to  tell  upon  that.  If  any  of  ihe  other 
gentlemen  desire  to  ask  any  question  they  may  do  so  now. 

Ah;.  Dawson:  T  wish  to  say.  your  Lordship,  it  will  be  a  great  pleasure  to 
answer  any  question  if  T  can.     If  I  cannot  T  will  say  I  cannot. 

The  Commissioner:  You  have  dealt  with  the  broad  question  historically 
and  with  the  three  systems,  ami  have  given  your  opinion  as  to  which  is  the  best  of 
the  three. 

Mr.  Dawson:     Tn  general,  yes. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  4U5 

The  Commissioner:  If  there  is  any  question  upon  that  branch  of  the 
subject  any  gentleman  desires  to  pjul  to  Mr.  Dawson  uow  1  think  is  the  time 
lo  do  it.     II  not  1  have  a  few  questions  1  would  like  to  ask  him. 

Mi;.  Bancroft:  In  speaking  of  the  assessment  of  the  employers  in  industries., 
]  would  like  to  ask,  in  speaking  of  the  collective  method  of  insurance,  as  to  whether 
you  have  anything  in  your  mind  which  relates  to  an  assessment  upon  the  workmen? 

The  Commissioner:  We  will  come  to  that  later.  That  is  not  on  this  branch 
of  the  subject. 

Mr.  Bancroft:  I  would  like  to  ask  you  another  question,  Mr.  Dawson,  and 
that  is  this,  as  to  which  you  think  is  the  safest  plan  for  compensation  to  workmen, 
the  capitalization,  as  in  the  State  of  Washington  Act,  or  in  those  places  you  have 
spoken  of,  or  the  current  cost  system,  where  the  employers  pay  during  that  year 
enough  to  meet  the  expense  occasioned  in  that  year? 

Mr.  Dawson  :  If  the  State  assumes  this  burden  and  provides  for  the  payment 
to  the  workmen  I  should  regard  one  system  quite  as  safe  as  the  other.  If  the  State 
puts  the  burden  entirely  on  the  fund  and  does  not  assume  the  liability  in  case,  for 
instance,  the  fund  should  be  badly  invested,  or  anything  of  that  sort,  I  should 
regard  the  capitalized  system  as  very  much  more  dangerous  than  the  other.  The 
real  assurance  that  the  payment  will  be  made  is  the  adoption  of  this  principle  by 
the  State  or  nation,  and  the  adoption  of  a  plan  or  programme  for  collecting  the 
money  to  do  the  things  that  are  there  promised.  I  do  not  think  the  question  would 
ever  arise  in  Germany  among  workmen  as  to  whether  they  were  not  as  well  pro- 
vided for  as,  for  instance,  in  Great  Britain  where  capitalised  vahte  is  held  by 
insurance  companies.  I  think  they  would  feel  very  much  safer  under  the  guarantee 
of  the  German  Government  than  under  the  guarantee  merely  of  an  insurance 
company.  As  regards  Norway  I  am  sure  the  confidence  of  the  people  is  in  the  fact 
that  the  Norwegian  nation  is  behind  the  promises.  If  that  were  not  true  a  bad 
administration  might  lose  the  whole  fund  and  the  workmen  be  left  without  the 
protection. 

The  Commissioner  :  What  is  there,  Mr.  Dawson,  to  prove  that  the  improved 
condition  in  Germany  of  which  you  speak  is  due  either  wholly  or  mainly  to  those 
things  vou  have  been  telling  us  about. 

Mr.  Dawson  :  Only  the  opinions  of  the  most  competent  observers  there,  your 
Lordship.  The  employers  of  labour,  the  workmen  themselves,  the  statesmen  of  the 
country,  of  all  parties,  and  the  very  cautious,  careful  and  thorough-going  students 
of  the  subject  are  pretty  nearly  a  unit  on  that  question.  Mr.  George  when  he  made 
that  investigation  before  they  introduced  anything  in  Great  Britain  caused  the 
interviews  to  be  put  down,  and  T  presume  your  Lordship  may  have  seen  the 
report.  There  is  a  little  Old  World  reasoning  about  that  which  I  think  your  Lord- 
ship would  be  interested  in  if  I  would  mention  it.  The  old  Chinese  philosopher 
Mincius  put  forward  the  proposition  that  when  the  people  are  assured  against  mis- 
fortune they  are  of  a  fixed  heart,  and  when  on  the  other  hand  they  are  overcome  by 
misfortunes,  not  by  their  own  fault,  they  are  not  of  a  fixed  heart.  It  seemed  to  me, 
Sir,  as  I  went  about  there  in  Germany  that  there  was  a  lot  of  truth  in  that.  They 
are  not  well  paid  as  we  pay  American  or  Canadian  workmen,  but  they  really  did 
have  an  air  of  well  being  that  seemed  to  speak  well  for  the  efficiency  of  the  system. 

The  Commissioner:  But  these  laws  that  you  speak  of  as  insuring  against 
accidents  are  only  a  part  of  what  they  have  in  Germany? 

Mr.  Dawson:     That  is  true. 

The  Commissioner:  Is  it  not  the  aggregate  of  all  the  laws  that  leads  to 
this  condition  ? 


406  MINUTES  OF  EVIDENCE:  Xo.  65 

Mr.  Dawson  :  The  aggregate  of  all  insurance  laws.  Insurance  laws  all 
grow  out  of  the  accident  legislation,  and  in  addition  are  largely  merely  supple- 
mental to  it. 

The  Commissioner:  Do  you  attribute  the  improvement  of  the  condition  of 
the  German  workmen  entirely  to  this?  Is  it  not  that  he  was  low  down  and  has 
grown,  and  that  by  comparison  the  Englishman  who  was  away  ahead  of  him  has  not 
grown  so  rapidly?     Is  there  not  something  in  that? 

Mr.  Dawson:  Yes,  I  think  there  is,  your  Lordship.  I  do  not  think  that 
this  is  the  sole  cause  by  any  means. 

The  Commissioner:  There  are  some  people  who  think  that  the  system  of 
protection  in  Germany  led  to  the  improvement  in  the  condition. 

Mr.  Dawson  :  I  am  aware  of  that,  and  I  think  there  may  be  some  ground  for 
that  argument  too,  although  I  have  not  been  a  strong  protectionist  myself. 

The  Commissioner  :  I  did  not  quite  understand  how  you  thought  it  would  be 
practicable  under  such  a  system  as  could  be  adopted  here  that  the  employers  should 
administer  the  fund.  If  the  State  is  to  be  behind  the  fund  how  can  it  possibly  be 
that  the  employers  could  control  it  ? 

Mr.  Dawson:  As  I  stated  at  the  outset,  your  Lordship,  I  really  do  not  feel 
competent  to  deal  with  the  particular  conditions  here,  and  if  I  answer  your  Lord- 
ship's question  I  trust  you  will  take  it  with  as  much  consideration  as  possible.  I 
do  not  really  wish  to  make  a  suggestion  as  to  how  you  could  best  deal  with  it,  for 
1  do  not  feel  that  I  understand  the  circumstances  sufficiently  well. 

The  Commissioner:  Perhaps  you  will  explain  a  little  more  fully  how  the 
employers  administer  the  fund  there? 

Mr.  Dawson:  Yes,  and  then  perhaps  I  can  give  you  a  parallel  statement  as 
to  how  I  think  they  could  do  it  in  the  United  States,  and  that  may  be  useful.  The 
way  they  do  it  there  is  this,  the  State  furnishes  the  compulsion.  It  says,  you  must 
join  these  associations;  you  must  make  your  payment  to  that  association;  the 
association  of  the  trade  in  which  you  are  engaged  shall  levy  a  tax  upon  you  pro- 
portionate to  your  pay-roll  and  the  estimated  hazard  of  that  business,  and  you  must 
pav  it.  It  then  says  all  of  you  who  are  engaged  in  that  trade  may  cast  votes 
towards  electing  persons  who  will  manage  that  particular  association.  It  will  be 
the  duty  of  that  association  to  adjust  claims,  to  make  provision  for  the  carrying  out 
of  the  different  things  that  are  required  under  the  law,  to  make  its  reports  annually, 
to  distribute  at  the  end  of  the  year  the  assessment,  which  I  explained  to  your  Lord- 
ship has  been  arranged  for  absolutely,  definitely  through  the  payments  having  been 
made  through  loans  by  the  Savings  Banks — to  distribute  that  assessment  at  the  end 
of  the  year  according  to  the  pre-arranged  assessments,  and  so  on.  The  result  is  the 
machinery  is  entirely  in  the  hands  of  that  mutual  association. 

The  Commissioner:     Suppose  the  mutual  association  does  not  act? 

Mr.  Dawson  :     The  Government  would  not  permit  it  not  to  act. 

The  Commissioner:  Perhaps  here  there  might  be  more  difficulty  than  in 
Germany. 

Mr.  Dawson  :  I  do  not  say  that  such  a  thing  might  not  happen,  but  I  do  say 
I  do  not  think  it  would  happen.  I  think  the  employers  as  a  class  are  very  willing 
and  really  very  anxious  in  their  own  interests  to  take  part  in  it. 

The  Commissioner:  It  would  rest  upon  thai  state  of  mind  of  the  employers 
continuing. 

Mr.  Dawson  :  Well,  oP  course  it  is  one  of  the  open  features.  Of  course  if 
they  do  not  it  would  be  up  to  the  State  to  provide  other  means. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  L07 

The  Commissioner:  Does  it  not  look  like  a  roundabout  method,  especially 
if  the  employers  determine  the  claims — if  they  do. 

Mr.  Dawson  :     They  do. 

The  Commissioner:     Does  that  not  make  them  judges  in  those  cases? 

Mr.  Dawson:  That  is  one  weakness — the  adjustments  made  by  these 
employers'  associations.  They  were  criticised  as  being  entirely  too  liberal  by  Mr. 
Friedensburg.  They  are  so  severe  that  one  half  of  the  claims  are  sent  to  the 
Committees  of  Arbitration.     The  workmen  will  not  stand  for  half  of  them. 

The  Commissioner  :     They  have  the  option  of  sending  it  on  ? 

Mr.  Dawson:  Yes.  That  is  one  feature,  and  I  think  the  new  bill — I  am 
not  sure  whether  it  remained  in,  but  it  was  the  intention  of  the  Government  that 
the  employees  should  be  represented.  The  employers  objected  to  that  very  power- 
fully and  perhaps  it  has  not  been  granted. 

The  Commissioner:  How  about  the  great  body  of  people  before  these  Acts 
came  into  force?     How  are  they  protected? 

•Mr.  Dawson  :  In  Germany  the  following  was  the  situation  before  anything 
had  been  done.  The  civil  law  gave  even  less  chance  of  recovery  than  the  common 
law,  and  especially  under  the  common  law  as  it  has  been  interpreted  by  the  courts 
of  Canada  and  the  United  States.  The  mining  industry  being  peculiarity  dangerous 
was  organized  into  a  mutual  association  such  as  was  referred  to  by  Mr.  Wegenast, 
and  thereby  agreement  between  the  employers  and  the  employees  there  had  been 
introduced  a  system  of  insurance  to  which  both  contributed,  and  a  few  other  in- 
dustries in  Germany  were  organized,  more  or  less  perfectly.  The  State  railroads 
were  also  maintaining  systems,  and  the  works  which  afterwards  became  the  famous 
Krupp  Works  also  had  a  system  of  mutual  contribution  in  existence.  That  is  about 
all  that  had  been  accomplished. 

The  Commissioner:  That  is  not  quite  what  I  meant.  The  body  of  the 
workmen  who  became  entitled  to  the  benefits  of  this  insurance,  the  men  who  had 
met  with  accidents  before  and  were  not  provided  for  at  all,  how  were  they  levelled 
up,  or  were  they  levelled  up  at  all? 

Mr.  Dawson:  As  I  stated  in  my  introductory  remarks,  the  situation 
was  this,  that  those  who  had  been  disabled  previously  and  their  families 
had  already  fallen  upon  the  public  or  private  charities,  or  in  some  other  way  were 
being  taken  care  of,  and  of  course  Germany  or  the  German  people  have  had  their 
care  on  their  shoulders  through  ordinary  taxation  or  other  means  ever  since,  until 
they  die  off.    That  is  likewise  true  in  Ontario,  of  course,  precisely  as  in  Germany. 

The  Commissioner  :  You  said  there  would  not  be  the  danger  of  discriminat- 
ing against  old  employees  under  a  State  system.  Was  not  something  you  said  a 
little  illogical,  if  I  may  be  pardoned  for  using  that  expression?  You  said  as  the 
amount  had  to  be  taxed  at  the  end  of  the  year  he  would  take  care  that  as  few 
accidents  as  possible  happened  in  his  industry,  and  therefore  he  would  use  the  more 
appliances. 

Mr.  Dawson:     Precisely. 

The  Commissioner  :  If  the  employment  of  younger  men  would  free  him 
from  accidents  would  he  not  be  likely  to  gravitate  in  that  direction. 

Mr.  Dawson  :  I  think  that  question  is  particularly  apt  and  I  congratulate 
your  Lordship  upon  having  presented  it.  The  situation  though  is  this,  that  it  is 
obviously  a  thing  which  could  not  be  done  for  an  entire  country  or  an  entire 
Province;  it  could  only  be  done  with  a  particular  employer.  The  whole  assoc- 
iation of  employers  could  not  keep  the  older  employees  out  of  service  unless  we  were 
to  assume  that  a  situation  existed  where  the  entire  industry  could  get  along  with- 


408  MINUTES  OF  EVIDENCE:  No.  65 

out  the  whole  complement  of  employees.  What  actually  would  happen  under  such 
circumstances,  if  an  individual  employer  tried  that  particular  way  of  getting  a 
lower  rate  for  himself,  would  be  merely  that  his  associates  in  that  mutual  association 
would  refuse  to  give  him  a  lower  rate.  You  see  the  private  insurance  company  is 
interested  in  the  matter  simply  this  way,  "  can  we  get  this  business  at  a  profitable 
rate?  In  the  first  place,  can  we  take  it  away  from  our  competitors,  and  secondly, 
can  we  do  it  at  a  profit."  They  are  only  thinking  of  the  specific  risk  in  that  case, 
and  they  say  to  that  particular  employer  if  you  will  do  so  and  so  we  will  do  so  and 
so.     Now,  that  condition   cannot   arise   in  the   entire   State. 

The  Commissioner  :     That  is  a  difference  only  in  degree. 

Mr.  Dawson  :  In  any  event  it  is  the  universal  testimony  that  it  has  not  made 
its  appearance  in  countries  where  they  have  State  insurance. 

The  Commissioner:  Now,  you  spoke  of  the  large  increase  in  the  rates.  Is 
it  quite  accurate  to  say  that  was  due  entirely  to  the  increased  burden,  and  was  not  a 
good  deal  of  it  due  to  the  fact  that  these  risks  were  being  carried  at  too  low  a  rate  ? 

Mr.  Dawson:  On  the  contrary  the  rates  I  read  you  first  as  in  existence  in 
Great  Britain  in  1897  before  the  first  Workmen's  Compensation  Act  went  into 
effect  were  profitable,  and  the  companies  were  making  good  margins  on  them. 

The  Commissioner  :     They  could  not  have  paid  many  losses  ? 

Mr.  Dawson  :  Very  light  losses  indeed,  and  since  the  new  law  went  into  effect 
ever  since  1897  they  have  been  losing  money,  and  steadily  losing  more. 

The  Commissioner  :  If  you  started  a  mutual  company,  fire,  life  or 
accident,  and  proposed  simply  to  assess  for  the  losses  as  they  'happened,  would 
there  not  be  inevitable  bankruptcy  in  a  short  time?" 

Mr.  Dawson:  It  would  be  bankruptcy  in  Germany  likewise  for  that  mutual 
association  if  it  was  not  for  the  State  compulsion;  there  is  no  doubt  about  that. 

The  Commissioner:  I  suppose  there  is  this  difference,  that  it  would  be  com- 
pulsory new  business  all  the  time.     Everybody  would  hav^  to  come  in. 

Mr.  Dawson:     That  is  it. 

May  I  state  here  the  assessment  life  insurance  is  the  most  dangerous  form  of 
assessment  insurance  on  account  of  men  growing  older  and  the  risk  getting  greater, 
and  yet  we  actuaries  are  of  the  opinion  that  a  life  insurance  would  be  entirely 
practicable  and  entirely  solvent  on  an  assessment  plan  if  we  had  compulsion. 

The  Commissioner:     If  everybody  had  to  insure? 

Mu.  Dawson:  Yes,  and  yet  if  you  tried  the  same  thing  on  a  voluntary  plan 
it  would  break  down. 

The  Commissioner:     This  surcharge  as  it  is  called,  is  that  a  large  amount? 

Mr.  Dawson  :  It  no  doubt  aggregates  quite  a  good  amount.  I  don't  recall 
what  it  is,  but  it  is  many  times  smaller  than  the  capitalized  values  would  have 
been. 

Tn  e  <  ommissioner  :     It  is  a  kind  of  reserve,  is  it? 

Mi;.  Dawson:  It  is  a  reserve,  and  it  is  held  as  I  have  stated,  for  the  purpose 
of  taking  care  of  a  situation  of  general  prostration  of  industry.  They  have  never 
had  to  use  it  yet. 

The   Commissioner:     Yon  tell   me   in   Germany  they   went   to   the   Union 
Postal  Savings  Banks  and  drew  the  money? 
Mi;.  Dawson:     Yes. 

The  Commissioner:  If  Mr.  Wegcnast  is  righl  that  this  law  would  be  a 
burden— thai  would  be  of  course  if  capital  sums  were  paid — of  Erom  four  to  six 
millions  a  year,  it  would  lie  a  pretty  strong  State  that  could  meet  these  demands  as 
they  came  up  to  the  counter. 


1912  \V()IM\  M  i:.\"S  COMPENSATION   COMMISSION.  L09 

Mr.  Dawson:  It  would  be  of  the  same  nature  as  a  State  borrowing  on  the 
head  of  the  collection  of  its  taxes.    It  would  be  the  same  type  of  thing. 

The  Commissioner:  What  do  you  think  of  those  figures?  Perhaps  it  is 
unfair  to  ask  you  that  without  the  data,  but  it  rather  startled  me.  Four  to  six 
million  dollars  additional  by  a  system  such  as  is  in  Great  Britain,  for  instance. 

Mr.  Dawson:     How  much  is  your  pay-roll? 

Mr.  Wegenast:  May  I  state  roughly  how  I  put  it? 

The  Commissioner:  Just  state  your  figures,  and  let  him  make  his  com- 
putation. 

Mr.  Wegenast:  I  worked  it  out  on  the  basis  of  a  pay-roll  of  $150,000,000, 
which  is  a  very  conservative  estimate  I  think  of  the  pay-roll  represented  by  the 
manufacturing  employments  in  this  Province,  and  I  ventured  the  rough  estimate 
that  on  the  basis  of  $150,000,000  an  act  like  that  of  England  would  cost  from 
four  to  six  million  dollars  a  year  more  than  is  being  paid  now. 

Mr.  Dawson:  Mr.  Wegenast  mentioned  to  me  something  like  four  times  as 
much,  and  I  took  the  figures  of  British  Columbia  and  Quebec,  and  the  previous 
rates  charged  there  by  the  Canadian  companies,  all  of  which  I  collected  for  my 
own  Government  some  time  ago,  and  I  came  to  the  conclusion  that  roughly  the  rates 
were  about  three  times  as  much,  averaging  between  those  two  provinces,  as  what 
they  were  before.  I  also  came  to  the  conclusion  that  the  average  rate  paid  by 
employers  was  about  75-100  of  1  per  cent.,  or  75  cents  on  $100  of  pay-roll,  and  if 
that  is  true  and  if  these  figures  are  correct  here,  which  of  course  I  do  not  know 
about,  roughly  at  the  present  time  they  are  paying  $1,125,000  Ave  will  say  if  they 
were  all  insured  and  were  doing  it  through  the  insurance  companies,  and  I  should 
say  from  the  comparison  that  I  made  that  the  payment  would  not  be  less  in  any 
event  than  $3,500,000. 

The  Commissioner:     Total? 

Mr.  Dawson:  Yes.  So  the  difference  would  be  about  $2,500,000.  Now, 
that  is  a  very  rough  statement,  and  I  would  not  like  to  be  bound  by  it  in  any  way. 

Mr.  Wegenast:  I  was  basing  my  rates  on  the  Washington  Act,  of  course. 
You  said  $2,500,000  of  an  increase? 

Mr.  Dawson  :     At  least  that  I  think. 

The  Commissioner  :  If  something  on  this  line  were  adopted  and  it  was 
impracticable  for  the  State  to  provide  the  funds  as  they  are  provided  in  Germany,  it 
would  be  necessary  to  start  with  a  down  payment  of  some  kind. 

Mr.  Dawson  :     Yes,  it  would  be. 

The  Commissioner:     How  would  you  think  that  could  be  best  regulated? 

Mr.  Dawson:  Well,  actuaries  could  work  that  out  for  you  reasonably  close. 
They  would  necessarily  provide  in  such  manner  that  they  would  feel  confident  that 
the  amount  collected  at  the  beginning  of  the  year  would  be  sufficient  so  that  there 
would  probably  be  some  surplus  to  start  the  next  year  with,  but  that  could  be 
reasonably  closely  worked  out,  a  great  deal  more  closely  than  it  could  be  on  a 
capitalized  value  plan,  for  this  reason,  that  on  a  capitalized  value  plan  you  have 
the  uncertainty  about  the  number  of  accidents  and  their  severity,  and  we  have  also 
the  uncertainty  about  the  correct  capitalized  values  of  the  benefits  that  should  be 
paid  for  them.  You  have  the  double  uncertainty  which  makes  it  much  harder  for 
an  actuary  to  deal  with  than  the  pure  risk. 

The  Commissioner:  The  assessment  plan  that  is  in  use  here  in  fire  insurance, 
and  I  suppose  it  obtains  elsewhere,  with  the  premium  note  and  the  fixed  payment 
on  account  of  that,  and  then  an  assessment  to  meet  the  losses? 


410  MINUTES  OF  EVIDENCE:  No.  65 

Mr.  Dawson:  A  system  such  as  that  could  be  utilized.  Speaking  of  that, 
I  suppose,  your  Lordship  is  familiar  with  the  tremendous  work  which  has  been  done 
by  the  mill  mutuals  in  Massachusetts  and  our  eastern  States? 

The  Commissioner:     No,  I  am  not. 

Mr.  Dawson:  Cotton  mills  prior  to  the  adoption  of  the  mill  mutual  system 
were  paying  rates  all  the  way  from  two  and  a  half  per  cent,  to  as  high  as  six  per 
cent,  per  annum  on  the  value  of  the  property  for  fire  insurance,  and  the  fire  com- 
panies were  not  making  any  money  at  that.  They  created  mutual  associations  and 
adopted  the  prevention  idea  very  powerfully,  and  they  have  reduced  the  rate,  until 
to-day  it  costs  less  to  insure  the  cotton  mills  of  Massachusetts  than  a  residence. 

The  Commissioner:  Is  that  a  reflection  on  the  owners,  when  they  insure 
themselves  there  are  not  as  many  fires? 

Mr.  Dawson:  I  take  it  it  is  mainly  because  they  have  introduced  most 
excellent  methods  of  prevention.  For  instance  it  is  one  of  the  rules  of  one  of  those 
mill  mutuals,  if  you  don't  do  the  thing  we  order  get  out.     That  is  the  point. 

The  Commissioner  :     Are  they  very  numerous  ? 

Mr.  Dawson:  There  is  a  long  list  of  them,  and  they  now  cover  the  cotton 
mills  of  the  entire  country. 

The  Commissioner  :  What  do  you  say  about  the  shifting  of  the  burden  from 
John  Smith  to  Thomas  Jones,  which  such  a  system  would  necessarily  involve? 

Mr.  Dawson:  Merely  this,  that  if  the  principle  is  correct  that  it  is  a  com- 
munity method  there  does  not  seem  to  be  any  great  reason  why  the  community 
should  undertake  to  solve  it  in  one  way  that  is  inconvenient  and  burdensome 
rather  than  in  another  way  which  is  less  inconvenient  and  less  burdensome,  merely 
because  some  particular  individual  may  not  pay  as  large  a  rate  in  one  case. 

The  Commissioner:  If  you  have  what  looks  like  a  hard  object  lesson  it 
makes  people  think  the  law  is  bad.  Supposing. now  this  year  a  man  conducts  his 
factory  very  badly  and  there  are  a  number  of  serious  accidents  in  it  and  he  breaks 
down,  and  the  burden  of  that  is  thrown  upon  the  future  years  and  the  men  that  have 
been  careful.     Will  it  not  strike  people  that  that  is  unjust? 

Mr.  Dawson:  Well,  you  will  only  very  partially  avoid  that  under  the  capit- 
alized value  system.  Let  me  take  an  illustration  in  dollars  so  we  can  get  it  clearly. 
Suppose  for  instance  for  the  amount  that  had  to  be  paid  out  for  the  year  the  cost 
was  ten  cents  on  $100  of  pay-roll.  Let  us  assume  that  that  is  only  one-tenth  of 
the  total  cost.  It  probably  would  be  one-sixth  or  one-seventh,  but  we  will  take  it 
one-tenth,  and  consequently  he  should  have  paid  $1.  Now,  if  a  condition  such  as 
you  speak  of  arises  the  probabilities  are  the  losses  which  he  will  throw  on  that  fund 
one  dollar  will  not  come  within  any  distance  of  covering  it ;  it  will  be  ten  dollars,  or 
a  large  amount — such  as  a  big  explosion  might  cause — so  you  see  it  is  only  a 
question  of  degree  after  all,  and  insurance  is  intended  to  take  care  of  that  sort  of 
situation. 

The  Commissioner:  No  doubt.  With  the  Ohio  law  there  must  be  at 
least  five  employees  to  bring  it  within  the  taxation.  What  do  you  say  as  to  any 
such  limit?     Should  there  be  any  limit  at  all  in  that  direction? 

Mr.  Dawson:     Personally  I  think  not. 

The  Commissioner:  How  would  it  be  practicable  in  a  country  like  this 
extending  from  almost  Winnipeg  to  Labrador.  Our  Province  itself  is  a  very  big 
Province,  and  how  would  it  be  practicable  to  collect  taxes  from  all  these  small 
concerns. 

Mr.  Dawson:  There  will  be  occasional  failures.  There  are  in  Germany 
occasional  .failures  to  collect,  but  I  do  not  think  the  failures  are  larger,  or  perhaps 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  411 


quite  as  large,  as  in  the  collection  of  some  other  kinds  of  taxes.  You  see  most 
people  who  pay  wages,  especially  in  industries,  are  people  of  some  substance,  and 
as  a  rule  I  think  the  taxes  are  collected  rather  more  easily  than  some  other  forms 
of  (taxes,  with  a  smaller  percentage  of  loss. 

The  Commissioner:  Do  you  think  the  men  who  are  liable  for  it  would 
voluntarily  pay.  and  you  would  not  have  to  get  after  them?, 

Mr.  Dawson:  The  experience  in  these  other  countries  is  they  did  not  have 
to  get  after  them. 

The  Commissioner:  I  thought  an  income  tax  nearly  everybody  tried  to 
avoid. 

Mr.  Dawson:  Yes,  that  is  true, 

The  Commissioner  :  What  machinery  in  such  a  country  as  this  could  be  de- 
vised for  collecting  these  rates? 

Mr.  Dawson  :  You  would  have  to  use  the  same  machinery  virtually  that  the 
employers*  liability  insurance  companies  use  now.  That  is  travelling  auditors 
who  visit  the  offices  of  the  employers. 

The  Commissioner:  That  would  only  reach  the  big  ones,  and  you  want  to 
get  the  little  ones. 

Mr.  Dawson  :  They  insure  the  little  ones,  too. 

The  Commissioner:  They  do  not  get  down  to  the  small  ones  that  are  here. 
I  suppose  you  would  have  to  let  them  out. 

Mr.  Dawson  :  The  vast  majority  of  the  risk  written  by  the  employers'  lia- 
bility companies  are  on  small  employers.  The  biggest  companies  rarely  insure 
anybody. 

The  Commissioner  :     But  they  are  in  central  positions,  not  in  remote  parts  ? 

Mr.  Dawson:  That  is  substantially  true. 

The  Commissioner  :  It  might  be  as  much  trouble  to  collect  these  taxes  as  it 
would  amount  to. 

Mr.  Dawson  :  It  might  in  some  cases,  but  I  think  the  Government  would  not 
have  any  greater  difficulty  than  with  its  other  taxes  in  the  same  neighbourhood. 

The  Commissioner  :  Is  the  basic  principle  of  this  law  you  advocate  economic 
or  humanitarian? 

Mr.  Dawson  :  I  consider  it  is  economic.  It  has  its  humanitarian  phase,  as 
all  economic  things  have.  In  other  words,  if  it  would  be  healthier  and  better,  and 
if  it  would  tend  to  a  higher  type  of  man,  and  the  creation  of  greater  efficiency, 
and  of  men  who  when  they  undergo  these  misfortunes  bear  up  beneath  them,  then 
1  would  be  in  favor  of  their  doing  it,  even  if  it  caused  great  distress. 

The  Commissioner:  Our  hospitals,  and  all  those  things,  are  all  on  humani- 
tarian grounds. 

Mr.  Dawson  :  Yes,  and  in  Germany  they  are  doing  tremendous  work  towards 
the  creation  of  more  efficient  men  and  better  conditions,  but  the  primary  step  is 
not  humanitarian  after  all-  The  primary  step  here,  it  seems  to  me,  is  first  justice 
and  the  second  economic  consideration. 

The  Commissioner  :  In  the  case  of  a  man  who  by  his  own  fault  has  brought 
about  his  death,  is  there  anything  but  humanitarian  grounds  that  would  justify 
the  taking  out  of  the  employing  community  compensation  for  him? 

Mr.  Dawson:  Well  now,  your  Lordship,  I  would  like  to  draw  a  distinction 
there.     If  it  is  his  own  fault  in  the  sense  of  carelessness . 

The  Commissioner  :  I  do  not  mean  that. 

Mr.  Dawson:  You  mean  wilfully? 


412  MINUTES  OF  EVIDENCE:  No.  65 

The  Commissioner  :  Or  such  a  thing  that  anybody  seeing  it  would  say  that 
man  went  to  his  death  with  his  eyes  open. 

Mr.  Dawson  :  I,  personally,  consider  that  the  only  ground  that  should  be 
included  Avith  the  other,  and  I  am  not  at  all  clear  it  should  be  either — I  would  not 
object  in  the  statute  to  see  wilful  fault  absolutely  excluded.  There  are  relatively 
few  and  they  could  be  dealt  with  through  private  and  public  charities  at  present, 
but  if  there  is  any  principle  I  think  it  is  not  humanitarian.  I  think  it  is  strictly 
economic.  Let  us  take  an  illustration.  Supposing  John  Doe,  living  in  the  city  of 
Toronto,  virtually  commits  suicide  by  doing  a  thing  that  was  either  so  rash  or 
crazy  or  reckless,  or  else  he  was  intending  to  commit  suicide  and  everybody  was 
convinced  it  was  wholly  his  fault.  Under  such  circumstances,  if  he  leaves  a 
family  in  destitution  the  city  or  the  province,  either  through  public  or  private 
charity,  is  going  to  support  that  family  and  educate  it.  They  will  do  it  anyway 
if  you  do  not  have  any  law  at  all,  and  if  there  is  any  reason  for  bringing  him 
within  this  act  it  is  merely  that  his  family  may  not  be  brought  up  on  the  pauper 
basis. 

The  Commissioner:  That  falls  upon  everybody  in  the  community.       That 
does  not  fall  on  the  employers. 

Mr.  Dawson  :  It  does  not  fall  on  the  employers  except  as  a  means  of  transfer. 

The  Commissioner:  I  judge  that  your  idea  is  that  the  employer  gets  it  back 
again. 

Mr.  Dawson  :  My  judgment  is  it  is  part  of  the  cost  of  carrying  on  the  busi- 
ness, and  will  be  transferred  with  other  costs  into  the  price. 

The  Commissioner:  What  do  you  do  with  the  commodity  where  the  world's 
market  controls  the  price? 

Mr.  Dawson  :  It  would  be  affected  by  the  German  and  the  French  and 
the  British,  and  all  the  rest  of  them.  They  all  have  the  same  thing,  and  that 
market  has  already  a  provision  in  the  price  for  this  thing. 

The  Commissioner  :  This  man  cannot  raise  his  price  at  all  if  you  put  another 
burden  upon  him.  Take,  for  instance,  the  mining  industry  or  the  lumber  industry, 
how  can  they  add  anything  where  the  market  is  the  world  ?  How  can  the  man 
who  produces  wheat  add  anything? 

Mr.  Dawsox  :  I  would  rather  take  some  business  which  is  already  a  world's 
business  in  which  other  countries  are  engaged.     Let  us  take  mining. 

The  Commissioner:  Is  mining  not  a  harder  one? 

Mr.  Dawson:  I  will  take  mine  first  and  then  your  Lordship's.  If  it  is  already 
a  world's  business  in  which  Germany  and  Great  Britain  and  all  these  countries  are 
engaged,  and  if  the  prices  are  fixed  in  the  world's  markets  with  reference  to  those 
conditions,  then  either  one  of  two  things  is  happening:  either  Canada  or  the  United 
States  where  those  conditions  do  not  exist  is  dragging  down  the  world's  market 
to  their  level,  which  ought-to  be  stopped,  if  it  is  resulting  in  all  the  cost  not  being 
paid,  or  else  the  employers  of  t\n'^'  countries  that  are  escaping  this  burden  are 
getting  higher  prices  than  they  (night  to  gel  unless  they  are  willing  to  assume  this 
burden.  I  will  give  an  illustration:  between  Camden  and  Philadelphia,  we  have 
New  Jersey  imposing  ten  times  the  premium  upon  the  industry  that  Pennsylvania 
dues,  and  the  industry  is  probably  nut  able  at  all  at  the  present  time  to  shift  it 
into  the  price  I'm'  (he  reason  that  it  has  competition  across  in  Philadelphia,  and  in 
that  matter  i  can  quite  see  that  il  would  be  a  hardship  under  those  conditions. 
\\  hit  ought  to  he  done    i>  Pennsylvania  should  pass  a  law  of  a  proper  character. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  113 


The  Commissioner:  I  want  to  go  back  to  the  firs!  point  we  were  dis- 
cussing. I  suppose  there  is  no  country  in  the  world  as  backward  until  the  last  few 
years  in  legislation  in  this  direction  as  the  United  States  of  America,  meaning  no 
offence  to  a  distinguished  citizen. 

Mi;.  Dawson  :  Certainly  not.  and  in  addition  your  own  country  was  on  a  level 
with  it. 

The  Commissioner:  Exactly.  Now.  is  it  not  a  fact  that  the  United  States 
artisan  and  the  United  States  manufacturer  have  advanced  more  rapidly  than  the 
German  artisan  and  the  German  manufacturer? 

Mr.  Dawson:     I  think  the  following  is  unquestionably  true  your  Lordship, 
that  the  conditions  of  freedom  in  your  country  and  in  mine,  and  the  conditions  of 
free  opportunity  which  held  hefore  the  workman  the  possibility  and  the  prospect 
of  being  engaged  in  something  other  than  manual  labour  after  awhile  has  had  a 
tremendous  effect.       There  is  one  thing  I  think  in  our  country — and  I  am  not 
speaking  of  yours  because  I  am  not  acquainted  with  it — to-day  there  is  a  wide- 
spread complaint  about  the  want  of  efficiency  in  workmen,  and  I  ascribe  it  to  the 
fact  that  for  the  last  twenty-five  years,  during  the  very  period  that  England  has 
been  giving  that  fixed  heart  that  Mincius  spoke  of  to  its  workmen,  we  have  been 
keeping  ours  on  a  sea  of  speculative  conditions  by  which  every  wrorkman  has  before 
him  the  object  lesson  of  his  mates  and  of  friends  of  his  in  the  same  occupation 
who  through  no  fault  of  their  own  have  nevertheless  become,  together  with  their 
families,  pauperized.     I  think  the  moral  effect  of  it  is  bad.     I  think  the  effect  of 
it  upon' the  efficiency  of  the  workman  is  had.     I  do  not  believe  as  conditions  stand 
to-day  the   workmen   of  my  country  are   on   the  whole,  taking  into   account   the 
greater  freedom    and   greater  opportunity   of   success,   as   efficient   as   they  are   in 
Germany.     !  am  sorry  to  say  it,  but  I  believe  it  to  he  the  case. 

The  Commissioner  :  Has  not  the  specializing  of  industries,  a  man  doing  just 
one  little  bit,  and  that  is  all  he  does,  and  another  man  does  a  little  hit,  made  it 
that  you  do  not  get  the  finished  artisan  that  you  had  in  former  days,  although  your 
production  is  better.  You  do  not  get  the  man  to  do  the  whole  thing  and  make 
him  a  better  man  as  an  artisan  than  the  man  who  is  practically  a  machine. 

Mr.  Dawsox  :  I  think  there  is  much  in  that,  and  yet  you  must  remember  that 
it  is  exactly  what  they  did  have  in  Germany  thirty  years  ago,  and  to-day  the  re- 
sult is  just  as  you  pointed  out  in  asking  me  a  question  earlier,  a  perfectly  tremend- 
ous improvement  in  the  efficiency  of  their  labour.  It  seems  to  me.  in  other  words, 
that  we  are  going  to  have  to  deal  with  the  whole  subject  much  more  scientifically, 
and  one  of  the  earliest  steps  to  deal  with  it  scientifically  from  the  standpoint  of 
the  historical  development  and  the  natural  development  is  right  here. 

The  Commissioner  :  If  you  were  free  in  your  country  from  constitutional 
difficulties  as  we  are  perhaps  free — perhaps  to  some  extent  tied  up — would  a 
national  system  be  preferable  to  a  local  or  provincial  system? 

Mr.  Dawson:  Decidedly.  I  believe  we  are  free  to  do  it  now.  The  National 
Association  of  Manufacturers  in  the  United  States  through  its  attorney,  without 
any  knowledge  at  all  that  I  was  working  on  it.  much  less  what  my  conclusions 
were,  arrived  at  the  conclusion  that  I  did,  that  it  was  constitutional,  and  the 
•attorney  of  the  New  York  Central  lines  independently  arrived  at  the  same  con- 
clusion. So  there  were  throe  of  us  working  entirely  separately  and  arriving  at 
the  same  conclusion.     That   view  is  growing  very  rapidly,  but  meanwhile,  until 


414  MIXUTES  OF  EYIDEXCE :  Xo.  65 


that  question  is  settled,  it  is  necessary  for  us,  as  it  is  here,  to  act  through  Pro- 
vinces, to  act  through  our  various  States. 

Me.  Bancroft  :  I  wanted  to  get  Mr.  Dawson  to  corroborate  one  or  two 
opinions  if  he  will.  While  more  interested  in  the  prevention  of  accidents  than 
the  compensation  from  our  standpoint,  Dr.  Cotton,  President  of  the  Imperial  In- 
surance Department,  says  this,  "  Recognizing  that  it  is  of  prime  importance  to 
prevent  injuries  the  State  officials  and  Employers'  Associations  have  concentrated 
their  combined  energies  upon  prevention,  and  wonderful  has  been  the  result. 
Scientific  accident  prevention  is  now  recognized  as  a  special  and  important  branch 
of  technical  engineering."  I  would  like  to  ask  Mr.  Dawson  if  he  has  found  that 
to  be  true  in  his  investigations? 

Me.  Dawson  :  Well,  that  is  unquestionably  a  very  moderate  statement  of  what 
has  taken  place  in  Germany. 

Me.  Banceoft:  It  is  better  than  that? 

Mr.  Dawson  :  Yes.  This  I  am  sure  would  interest  you  all.  "The  exhibi- 
tion of  the  means  adopted  for  prevention  of  accidents  in  Germany  in  the  tre- 
mendous exhibition  hall  that  is  always  open  every  day  in  the  week  and  every 
hour  in  the  day  in  Berlin  is  one  of  the  most  marvellous  things  that  I  have  ever 
seen,  and  the  marvellous  thing  about  it  is  not  merely  all  these  inventions."  You 
must  remember  they  show  them  here  in  Toronto  and  over  in  the  States  now  and 
then,  "but  every  solitary  one  of  them  that  is  of  value  has  been  adopted  by  the 
mutual  association  of  employers  and  enforced,  in  the  introduction  of  new  machinery 
at  least,  and  frequently  to  the  extent  of  even  old  machinery  to  be  removed  and  new 
put  in-" 

Me.  Banceoft  :  That  has  been  the  result  of  the  collective  liability  of  the 
employers  in  the  mutual  trade  associations? 

Me.  Dawson:     That  has  been,  undoubtedly. 

Me.  Banceoft  :  They  combine  among  themselves  to  see  that  those  regula- 
tions are  enforced,  and  they  do  that  for  the  mutual  protection  of  the  cost  of  the 
rate  upon  industry. 

Me.  Dawson  :     That  is,  it  causes  the  rate  to  be  lower. 

The  Commissionee  :  Just  one  question-  I  do  not  know  that  it  is  particu- 
larly your  branch,  Mr.  Dawson,  but  you  spoke  about  prevention.  What  means, 
if  any,  are  practicable  to  prevent  what  is  said  to  exist  to  a  very  considerable  extent, 
that  workmen,  especially  those  who  are  doing  piece-work,  will  when  devices  are 
supplied  for  their  protection,  throw  them  aside  and  will  not  use  them?  Is  there 
any  way  of  dealing  with  that  situation? 

Me.  Dawson  :  The  German  associations  go  to  the  length  of  requiring  an 
employer  to  dismiss  a  workman. 

The  Commissionee:  It  was  suggested  here,  and  it  was  suggested  that  the 
union  would  make  trouble,  and  say  that  that  was  not  a  sufficient  cause. 

Me.  Dawson  :  I  am  very  glad  your  Lordship  brought  up  that  point.  Xow, 
I  appear  here  as  a  witness  brought  by  the  Canadian  Manufacturers'  Association, 
and  I  am  glad  to  come,  but  I  was  counsel  for  the  shirt-waist  girls  in  Xew  York, 
and  that  work  I  was  doing  for  nothing,  from  sympathy,  in  other  words,  and  a 
great  deal  of  my  public  work  has  been  done  for  unions  and  for  working  people. 
There  is  one  thing  which  I  first  called  to  the  attention  of  a  committee  representing 
the  trades-unions  of  <ireat  Britain  at  the  International  Congress  of  Labour  Legis- 
lation at  Lucerne  some  three  years  ago,  just  before  I  returned  from  my  study 
for  the    Russell   Sage    Knniidaiion.     There  was  one  thing  that  impressed  me  very 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  415 

powerfully  in  'Germany,  and  that  is  the  workmen  seemed  to  have  a  complete  and 
very  full  realization  of  wherein  their  interests  were  adverse  to  their  employers'- 
That  is,  it  was  obviously  adverse  to  the  matter  of  getting  a  higher  wage,  and  in 
getting  shorter  hours  of  lahour,  and  similar  matters,  but  they  were  also  equally 
alive  to  the  things  in  which  their  interests  were  the  same  as  their  employers'. 
I  attributed  that  very  largely  to  the  fact  that  in  the  insurance  system  in 
Germany  there  is  a  very  large  element  of  co-operation  between  the  employers  and 
the  employee  in  carrying  it  out,  and  the  employers  through  their  representatives 
are  quite  accustomed  to  deal  with  the  employees  through  their  representatives, 
not  on  mere  occasions  when  there  was  some  difference  as  to  wages  and  hours, 
but  daily-  Now,  under  those  circumstances  they  do  not  strike  for  such  reasons 
as  you  speak  of.  Instead  they  say,  "You  deserve  it,  you  are  not  only  imperilling 
yourself,  but  imperilling  the  rest  of  us." 

The  Commissioner:  I  am  not  at  all  suggesting  that  is  what  the  unions 
would  do,  but  it  has  been  said  they  would. 

Mr.  Bancroft  :     It  was  not  said  by  the  workers'  representative-  ? 

The  Commissioner:     That  need  hardly  be  said. 

Mr.  Dawson:  There  is  one  illustration  which  would  appear  to  indicate  that 
they  do  enforce  rules  there  with  a  certain  amount  of  thoroughness.  We  observed 
in  visiting  an  iron  foundry  that  the  workmen  all  had  their  trousers  outside  their 
boots  in  the  usual  way.  Now,  I  have  happened  to  observe  in  quite  a  number  of 
cases  in  the  United  States,  especially  in  the  Western  States,  they  wear  their 
trousers  inside  the  boots.  This  was  called  to  our  attention  by  the  gentleman 
who  was  with  us.  He  told  us  one  of  the  rules  was  that  they  must  so  wear  their 
trousers.  I  said,  Why,  what  has  that  to  do  with  it?  He  said,  That  is  very 
simple,  if  there  happened  to  be  some  molten  metal  strike  their  trousers  and  the 
trousers  are  outside  the  boot  it  runs  on  to  the  ground,  but  if  they  are  inside  it 
runs  into  the  boot.     Now,  as  small  a  thing  as  that  calls  for  attention. 

The  Commissioner:  An  engineer  in  charge  of  a  stationary  boiler  knows 
that  he  has  allowed  the  water  to  get  out.  He  knows  also  that  half  a  dozen  men 
are  there  who  if  he  puts  cold  water  into  that  boiler  may  probably  have  their 
lives  lost.  He  does  it-  What  wouild  you  do  with  that  man  if  he  had  ten 
children?     Would  you  give  him  compensation? 

Mr.  Dawson  :  On  the  economic  ground  that  the  fact  that  he  caused  this 
thing  has  nothing  to  do  with  what  the  State  had  better  do  with  his  family  I 
think  I  would,  although  I  am  not  so  clear  about  it.  I  am  not  insistent  upon  it. 
But  in  any  event,  of  course,  the  others  you  would. 

The  Commissioner:  We  must  not  put  a  law  in  the  statute  book  that  would 
shock  the  conscience  of  the  people.  Suppose  you  had  it  demonstrated  that  a  man 
employed  in  a  powder  factory  had  deliberately  gone  into  the  factory  with  a 
lighted  pipe,  had  blown  up  the  factory  and  that  half  a  dozen  had  been  killed, 
and  that  was  all  in  the  papers,  and  you  proposed  to  pay  that  man  if  he  had  his 
leg  broken,  a  couple  of  thousand  dollars-  Would  that  not  shock  the  conscience 
of  the  community? 

Mr.  Dawson:  I  do  not  think  it  would  if  it  was  ordinarily  included.  I 
would  rather  answer  your  Lordship  by  what  actually  happened  in  one  country.  The 
French  spent  a  lot  of  time  in  their  National  Assembly  debating  that  question,  and 
they  finally  got  a  law  in  which  they  excluded  gross  negligence  on  the  part  of  the 
employee,  and  included  negligence  on  the  part  of  the  employer  and  made  it 
a  larger  amount  if  it  was  on  his  side.     I  do  not  know  the  number  of  cases  that 


416  MINUTES  OF  EVIDENCE:  No.  65 

have  so  far  been  brought  because  I  have  not  looked  into  it  for  about  three  years 
perhaps,  but  after  the  law  had  been  in  force  for  about  ten  years  the  number  of 
cases  were  less  than  twenty  in  the  entire  country  that  had  arisen  under  that 
feature  of  the  law,  and  my  recollection  is  that  in  only  about  seven  of  them  was  a 
favourable  decision  given. 

The  Commissioner:     That  is  on  both  sides  of  it? 

Mr.  Dawson:  So  really  it  did  not  prove  to  amount  to  anything.  It  looks 
in  theory  as  if  it  were  an  important  matter,  but  I  feel  personally  that  it  is  of 
no  very  great  importance  whether  it  is  in  or  out. 

The  Commissioner  :  But  you  believe,  with  the  people  of  this  country  or 
your  country,  if  a  thing  strikes  them  as  unjust  it  will  make  them  jealous,  and 
they  will  condemn  the  whole  law  if  in  a  particular  case  it  works  what  they 
conceive  to  be  an  injustice. 

Me.  Dawson:  They  have  not  had  a  gross  negligence  provision  in  the 
British  law. 

The  Commissioner  :  I  would  not  say  gross  negligence.  1  think  the  man 
in  the  case  I  put  is  a  crimina}. 

Mr.  Dawson  :  Well,  the  German  Act  has  always  had  a  provision  to  the 
following  effect,  that  the  criminal  aot  of  the  man  himself  would  exclude,  and  the 
criminal  act  of  the  employer  would  render  him  liable  for  the  entire  damage 
directily  and  immediately  instead  of  the  insurance  fund.  I  think  that  is  a  good 
provision  really. 

The  Commissioner:  You  have  not  said  whether  with  a  law  such  as  you 
have  suggested  the  common  law  liability  of  the  employer  should  go. 

Mr.  Dawson  :  If  it  were  not  for  the  example  that  Great  Britain  has  given 
us  I  would  be  disposed  to  say  undoubtedly.  The  experience  in  Great  Britain 
has  been  that  to  preserve  to  the  employee  the  rights  under  the  common  Haw  has 
not  been  a  serious  matter.  That  is  to  say,  it  has  been  taken  advantage  of  very 
little.  I  am  not  sure  that  that  experience  wouild  be  repeated  in  the  United 
States,  and  I  am  not  in  a  position  to  judge  at  all  as  regards  Canada.  I  am 
inclined  to  believe  under  existing  conditions  in  the  United  States,  if  the  right 
were  thoroughly  preserved  and  as  large  as  it  is  now,  the  common  law  would  be 
resorted  to  in  a  vast  number  of  cases,  and  it  would  make  a  great  deal  of  difference. 

The  Commissioner:  Well,  ought  it  to  be?  You  are  giving  to  the  work- 
man something  to  which  the  law  does  not  entitle  him. 

Mi;.  Dawson:     Yes. 

The  Commissioner:  Why  should  he  not  surrender  something?  It  might 
be  iii  a  h'\v  cases  some  use,  but  in  many  cases  it  would  be  of  little  or  none. 

Mi;.  Dawson:  In  my  judgment  if  a  plan  providing  ample  and  proper  com- 
pensation, and  especially  providing  compensation  that  continued  during  the  dis- 
ability, and  in  the  case  of  minor  children  until  they  were  sixteen  years  of  age, 
old  enough  to  go  to  work  ami  get  a  fair  education,  were  introduced  in  your  country 
or  in  mine,  the  workmen  a-  a  class  woujd  be  satisfied  with  that  law  and  would 
not  wish  the  common  law  to  be  maintained. 

The  Commissioner:  Would  it  not  seem  very  unjust  to  an  employer  who 
had, paid  Ins  contribution  that  he  should  be  liable  to  a  particular  employee  in  a 
common  law  action  besides? 

Mi;.  DAWSON:  It  has  been  decided  in  Montana  to  reserve  the  right  to  sue 
under  the  common  law  while  requiring  him  to  pay  compensation  .is  unconstitutional, 
and  they  uphold  the  constitutionality  of  the  law  in  every  other  respect. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  417 

The  Commissioner:  Oi'  course  if  that  was  the  direction  the  law  was  to  take 
it  must  be  made  so  that  there  would  be,  as  you  put  it,  a  full  and  reasonable  com- 
pensation to  the  man. 

Mr.  Dawson:  The  objection  which  started  strongly  in  the  State  of  Illinois, 
so  strongly  that  all  the  labour  people  in  the  United  States  decided  against  giving  up 
the  common  law  rights,  was  really  based  upon  the  proposition  to  greatly  limit 
the  benefits.  They  were  to  he  limited  to  a  very  short  term  of  years  and  to  a  very 
relatively  small  amount.  In  my  judgment  had  the  law  of  Illinois  been  that,  say, 
60  per  cent,  of  the  wages  should  be  paid  as  long  as  the  disability  continued,  which 
would  mean  liable  to  be  continued  for  life,  and  a  fairly  liberal  per  cent,  of  say  20 
per  cent,  for  a  child  to  be  paid  until  that  child  was  16  years  of  age,  in  my  judgment 
the  workmen  of  Illinois  would  not  have  objected.  Of  course,  as  large  an  allowance 
as  20  per  cent,  could  not  be  paid  if  there  were  a  large  number  of  children, .  but 
just  one  child.     I  mean  fatal  accidents. 

The  Commissioner:  Has  this  phase  been  considered?  Perhaps  it  would  be 
found  that  the  man  who  has  been  killed  has  something  put  by  and  that  his  family 
are  not  dependent  upon  the  fund.  How  then  is  it  justifiable  to  take  the  money 
and  pay  them? 

Mr.  Dawson:  The  same  economic  wrong  has  been  done  the  family.  There 
is  not  the  same  powerful  social  reason  for  doing  it,  but  if  you  did  not  do  it  then 
this  whole  thing  would  be  on  a  charity  basis,  and  if  it  were  all  on  a  charity  basis 
we  would  have  the  breaking  down  of  the  self-respect  of  families  exactly  the  same 
as  any  other  charity.  This  might  interest  your  Lordship  as  to  how  the  work- 
ingmen  look  at  it.  I  have  introduced  several  plans  of  so-called  mutual  associa- 
tions for  workmen  to  which  employers  contribute,  or  what  they  call  in  Great 
Britain  "  establishment  funds,"  which  by  the  by  was  the  thing  that  the  British 
Parliament  expected  to  become  the  great  thing  under  the  British  system,  but  it  did 
not  happen.  I  have  helped  to  devise  several  of  those  plans  in  the  States,  one  not 
long  ago  at  Albany,  for  instance.  Under  that  plan  the  employee  is  in  effect  giving 
up  his  common  law  rights,  because  he  cannot  draw  the  benefits  of  the  fund  and  at 
the  same  time  assert  hi?  common  law  rights.  The  very  first  receipt  he  signs  he 
signs  away  the  right.  We  provided  reasonably  liberal  benefits  in  the  form  of  so 
much  a  week  during  disability  based  upon  the  wages,  and  so  on.  and  so  much  in  the 
event  of  death,  and  calling  for  a  contribution.  It  covers  death  from  all  causes  and 
sickness  from  all  causes.  It  calls  for  a  very  liberal  contribution  from  the  employees, 
and  I  am  informed  that  every  solitary  man  in  the  works  is  satisfied  with  it,  and  I 
am  satisfied  that  no  stress  was  put  upon  them. 

The  Commissioner:     That  was  life  insurance. 

Mr.  Dawson  :  No,  you  see  it  covers  accidents  and  sickness  as  well,  and  death 
from  all  causes. 

The  Commissioner:     On  the  ordinary  life  insurance  plan. 

Mr.  Dawson  :  But  you  see  the  workmen  were  contributing  to  it  as  well  as  the 
employers.  So  I  do  not  think  when  the  benefit  is  substantial  and  is  such  as  to 
make  a  workman  feel  that  what  he  is  receiving  is  right,  and  will  do  the  thing  that 
is  expected  of  it,  there  will  be  any  disposition  to  insist  on  maintaining  the  common 
law  rights. 

Mr.  Wegenast:     I  have  persuaded  Mr.  Dawson  to  stay  over  till  to-morrow 
night  if  a  sitting  could  be  arranged.     I  would  very  much  like  to  see  a  sitting 
arranged. 
27  l. 


418  MIXUTES  OF  EVIDENCE :  Xo.  65 

The  Commissioner:  I  had  another  engagement,  but  perhaps  it  could  he 
arranged. 

Mr.  Kingston:  There  was  one  question  that  arose  out  of  the  discussion  as 
to  the  difficulties  of  collecting  this  tax.  Would  not  the  realization  on  the  part  of 
the  small  employer  that  if  he  did  not  pay  he  would  not  enjoy  the  benefit  of  the  Act 
be  a  means  which  would  induce  him  to  pay? 

Mr.  Dawson  :  I  should  think  that  would  be  an  unwise  thing  to  do.  I  should 
think  you  had  better  give  the  employee  the  right  to  get  on  the  fund  irrespective  of 
whether  you  collected  the  tax  from  the  employer  or  not.  I  am  not  familiar  with 
your  constitutional  limitations,  but  if  you  have  no  constitutional  limitations 
against  it  I  think  the  wise  thing  to  do  would  be  to  impose  this  as  an  excise  tax 
and  absolutely  prohibit  that  particular  business. 

The  Commissioner:     We  cannot  do  that.     That  is  Federal. 

Mr.  Dawson  :  In  the  United  States  the  States  and  the  Government  both  have 
that  power. 

Mr.  Bancroft  :  In  your  investigations  in  Europe  did  you  find  they  were 
better  satisfied  under  this  condition,  which  is  supposedly  a  heavy  burden  on  their 
industry? 

Mr.  Dawtson  :  On  the  whole  they  are.  You  will  find  individual  cases  where 
employers  complain.  They  generally  are  seeking  some  way  in  which  the  burden  can 
be  made  less  and  that  is  the  reason  why  prevention  has  so  powerful  an  influence. 

The  Commissioner:  How  do  you  get  that  testimony?  It  must  be  from 
seeing  individual  employers.  Is  there  any  collective  statement  anywhere  where 
you  can  see  how  those  who  are  entitled  to  speak  for  particular  trades  look  upon  it? 

Mr.  Bancroft  :  There  is  one  here  from  the  chairman  of  the  Employers'  Asso- 
ciations of  Germany. 

Mr.  Daavson  :  There  are  a  great  number  in  Mr.  Schwedtman's  work.  This 
is  spoken  by  Dr.  Spiecker. 

The  Commissioner:     Is  he  of  the  socialist  persuasion? 

Mr.  Dawson:  Xo,  indeed.  The  socialist  proposition  in  Germany  is  pecul- 
iarly a  trade  union  proposition,  and  pretty  nearly  all  the  working  population  of 
Germany,  that  is  the  wage-workers,  are  socialists  practically. 

"  To-day  everybody  who  views  the  situation  without  prejudice  must  acknow- 
ledge that  the  work  of  the  Employer:-"  Associations  in  this  field  of  prevention  and 
compensation  is  a  great  blessing  not  onlv  to  the  workers  but  to  the  industries  and 
the  nation.  It  is  perfectly  evident  to-day  that  we  have  secured  higher  efficiency 
in  industry  by  relieving  our  workers  from  the  worries  and  distresses  on  account  of 
sickness,  injury  and  invalidity."  That  is  a  quotation  taken  from  manuscript 
handed  to  me,  but  I  have  seen  the  passage. 

Mr.  Bancroft  :     Is  that  your  personal  opinion  ? 

Mr.  Dawson:  That  is  also  the  opinion  I  have  formed,  and  my  opinion  was 
based,  your  Lordship,  upon  the  following  things.  First,  upon  the  almost  absolute 
unanimity  of  the  statements  made  to  me  by  employers  and  by  persons  connected 
with  the  employing  classes.  Second,  by  my  knowledge  and  by  information  gleaned 
from  the  printed  statements  that  have  been  made  and  from  books  written  by  persons 
out  of  the  employing  classes  themselves.  Thiol,  from  statements  made  to  me  by 
Dr.  Zacher,  Dr.  Kaufmanu  and  others  who  have  made  a  very  thorough  study 
of  it,  and  are  well  acquainted  with  the  opinions  of  all  classes,  and  themselves  non- 
partisan. 

The  Commissioner:  According  to  Mr.  Wogenast  the  individual  emplovers 
in  (his  Province  require  a  good  deal  of  education.  They  do  not  seem  to  see  much 
use  of  a  change,  although  the  Association  as  a  body  has  taken  a  different  stand. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  419 

Mr.  Dawson:  The  fact  is,  of  course,  till  within  a  very  few  years  the  em- 
ployers in  your  country  and  in  my  country  have  not  given  this  particular  matter  any 
study  whatever.  As  long-ago  as  1898,  when  1  drew  the  first  Workmen's  Compen- 
sation Act  offered  in  the  States,  I  brought  it  then  to  the  attention  of  Mr.  Roosevelt 
who  at'tei  wards  became  President,  and  in  fifteen  or  twenty  minutes'  conversation 
made  him  see  the  principle  upon  which  it  was  based,  and  the  correctness  of  it,  and 
he  has  never  ceased  to  be  an  advocate  of  it.  I  also  brought  it  to  the  attention  of 
a  gentleman  who  was  then  the  President  of  the  Travellers'  Insurance  Company. 
He  was  hide-hound,  and  I  did  not  make  so  prompt  a  conversion,  but  he  came  to 
me  in  a  few  weeks  and  he  said,  "That  has  been  growing  in  my  mind,  and  it  seems 
to  be  right."  In  other  words  education  is  pretty  quick  in  these  things,  and  it 
works  quickly  when  it  once  gets  started,  but  1  think  it  is  quite  true  that  the 
employers  of  your  country  and  of  mine  have  not  until  recently  been  much  educated. 

Me.  Wegenast:  I  would  like  to  make  ono  remark.  You  used  the  expression, 
'  The  individual  employers  of  our  association."  With  the  words  "  the  "  left  out  I 
am  willing  to  let  it  stand,  but  otherwise  not. 

The  Commissioner:     It  could  not  be  the  body  of  them. 

Mr.  Bancroft  :     I  think  you  have  mentioned  this  report  ? 

Mr.  Dawson:     That  is  the  report  of  the  British  Trades  Union  Commission. 

Mr.  Bancroft:     Did  those  gentlemen  coincide  with  your  views? 

Mr.  Dawson:  In  general,  yes.  That  delegation  I  think  went  over  as  the 
result  of  the  suggestion  that  came  to  Mr.  McArthur  and  others  that  I  spoke  of, 
that  went  soon  after,  and  I  strongly  recommended  it. 

Mr.  Wegenast  :  You  spoke  about  that  in  your  brief  before  the  Federal 
Commission  ? 

Mr.  Dawson:     Yes. 

The  Commissioner  :  You  spoke  of  slums.  It  depends  a  good  deal  on  how 
a  man  looks  whether  he  finds  slums  or  not. 

Mr.  Dawtson:  Yes,  but  in  my  country  we  find  them  without  having  to  look 
far,  I  am  sorry  to  say. 

The  Commissioner:  We  had  a  distinguished  gentleman  here  a  little  while 
ago  who  pronounced  Toronto  free  from  slums,  contrary  to  the  opinion  of  some  who 
live  here.     I  hope  that  is  not  the  real  condition  in  Germany. 

Mr.  Dawson  :  I  think  not.  It  would  be  idle  to  say  that  there  were  no 
paupers  in  Germany,  but  it  is  a  fact  that  you  do  not  see  the  people  with  the  sodden 
appearance  and  the  hopeless  appearance  that  we  do  in  New  York,  and  many  other 
localities. 

The  Commissioner  :     The  housing  problem  has  a  good  deal  to  do  with  that. 

Mr.  Dawson:  Yes,  and  the  same  scientific  education  which  has  brought  this 
about  has  a  good  deal  to  do  with  the  housing  problem.  They  have  maintained  in 
Germany  a  thing  which  I  am  inclined  to  think  that  perhaps  your  Lordship  and 
myself,  and  others  who  have  stood  for  all  we  prize  in  British  law  will  some  day 
have  to  recognize  also,  and  that  is  that  there  is  a  paramount  right  after  all  in  the 
entire  nation  as  regards  realty.  They  do  one  thing  in  Germany  that  I  was  very 
much  against  my  wrill  compelled  to  admire,  and  that  is  they  really  do  tell  the 
owner  of  real  estate  "it  is  only  within  certain  limits  you  may  do  what  yon 
want  with  your  property."  I  wish  they  had  said  to  them  in  New  York,  you 
cannot  build  a  building  over  a  certain  height. 

Tith  Commissioner  :  You  push  the  price  of  the  surface  up  too  high  and  fchej, 
have  to  go  up. 


4-vJo  MINUTES  OF  EVIDENCE:  No.  65 

Mit.  Dawson  :  One  of  the  results  of  that  is  it  destroys  the  value  of  the  build- 
ing beside  it,  and  the  result  has  been  bad. 

Me.  Doggett:  I  would  like  to  ask  Mr.  Dawson  if  he  believes  that  workmen 
should  contribute  towards  State  insurance? 

Mr.  Dawson  :  It  is  a  question  I  am  very  willing  to  answer,  your  Lordship,  at 
the  proper  time. 

Me.  Bancroft:  Unless  Mr.  Wegenast  asks  Mr.  Dawson  about  that  we  are 
sbut  off,  and  we  shall  have  to  retain  Mr.  Dawson  as  our  counsel. 

Mr*.  Wegenast:  Mr.  Dawson  is  just  as  much  the  witness  of  the  labour  people 
as  he  is  ours. 

The  Commissioner:  I  forgot  to  ask  Mr.  Boyd  what  the  Norris  Bill  of  Ohio 
was.  I  judged  from  what  he  said  it  was  a  measure  introduced  some  two  or  three 
years  ago  which  took  away  the  doctrine  of  defences. 

Mr.  Dawson  :  It  is  called  the  Norris  Bill  there,  but  in  other  States  we  do  not 
call  it  by  the  name  of  the  author.  That  was  a  law  passed  two  years  before  the 
adoption  of  the  existing  law  took  away  the  defences  under  the  Employers'  Liability 
Act,  and  it  was  passed  with  the  avowed  purpose  of  frightening  the  employers  into 
being  willing  to  accept  something  in  the  way  of  a  Compensation  Act.  It  removed  I 
think  almost  entirely  the  risk  defence;  perhaps  not  entirely. 

The  Commissioner:  'Contributory  negligence? 

Mr.  Dawson:     I  think  something  of  that  kind. 

The  Commissioner:  Mr.  Boyd  said  it  did  away  with  contributory  negligence, 
J  think? 

Mr.  Dawson:  It  may  be,  but  where  it  was  clearly  the  employee's  fault  only, 
they  still  left  that  defence. 

Mr.  Wegenast:     That  is  a  thing  which  a  great  many  of  your  laws  have 
adopted,  I  think. 
«        MR.  Dawson:     Do  you  mean  like  the  Norris  law? 

Me.    Wegenast:     Enlarging    the    employer's    liability    by    taking    away    his 

defences. 

Mr.  Dawson  :  No  State  in  the  United  States  had  adopted  anything  like  the 
Norris  law,  or  the  law  I  have  described  except  Ohio,  and  one  Federal  law  where 
they  replaced  contributory  negligence  by  comparative  negligence,  and  modified 
the  assumption  of  risk. 

The  Commissioner  :     It  did  away  with  the  doctrine  of  common  employment. 

Mr.   Dawson:     Yes,  the   doctrine  of  common   employment   was  done  away 

with  entirely.     This  has  happened,  however,  that  after  the  decision  was  given  in 

;New  York  to  the  effect  that  the  New  York  Compulsory  Compensate  Act.  so-called, 

was  unconstitutional,  a  number  of  States  adopted  the  Ohio  way  of  dealing  with  the 

matter  at  Hie  same  moment  that  they  adopted  a  companion  act,  the  purpose  being 

io  give  a  very  strong  incentive  to  employers  to  come  under  the  Compensation  Act. 

Mi;.  Wegen  \st:     That  is  to  get  over  the  constitutional  difficulty. 

Mr.  Dawson  :  Yes,  it  was  a  mere  subterfuge.  In  this  case  they  also,  added 
tnig  to  [t,  in  ease  the  employer  did  not  come  under  the  Compensation  Act  he 
would  lose  the  right  to  sue  on  the  basis  that  these  special  defences  are  not  available. 
In  other  words  they  would  become  available  immediately. 

The  COMMISSIONER:  Are  yon  in  a  position  to  say  whether  there  has  been 
sufficient  experience  to  demonstrate  that  any  system,  if  adopted  now,  is  one  which 
would  bo  likely  to  be  reasonably  permanent? 

Mr.  Dawson:  T  think  the  German  system  will  certainly  be  permanent.  That 
is  the  ..pinion  of  all  close  students  of  this  thing  in  the  world  to-day. 


1912  WOKKMEN'S  COMPENSATION   COMMISSION.  421 


1  would  like  to  bring-  out  something  that  Mr.  Wegenast  intended  possibly  by 
ins  last  question.  You  asked  me  about  other  count  lies,  about  destroying  the 
defences.  There  is  one  country  that  gives  a  very  interesting  example,  and  that  is 
Switzerland.  I  think  it  is  a  particularly  good  example  because  i1  is  a  more  dem- 
ocratic country  than  yours  or  mine.  They  have  been  the  most  backward  country 
in  Europe  in  this  matter.  At  one  time  they  gave  a  mandate  to  their  Parliament 
to  pass  an  act,  and  they  did  pass  an  act,  1  think,  with  only  three  or  four  dissent- 
ing voices  in  the  two  Houses,  and  because  it  required  the  friendly  societies  and 
mutual  associations  of  employers  to  bring  themselves  to  a  reasonable  degree  of 
solvencj',  they  had  a  referendum  on  it  and  kicked  it  into  the  street,  but  meanwhile 
they  kept  insisting  upon  the  enlargement  of  the  right  of  the  employee  to  recover 
under  the  existing  system  and  also  without  regard  to  these  special  defences,  until 
they  wiped  out  all  these  defences.  Now,  the  effect  of  that  has  been,  as  was  found 
when  there  was  an  investigation  made  in  Switzerland  in  1900,  that  the  Swiss  em- 
ployers are  paying  for  employers'  liability  insurance  somewhat  more  money  than 
would  be  necessary  to  give  very  liberal  compensation  on  the  basis  of,  I  think.  70 
per  cent,  of  the  wages  in  the  event  of  disability  under  a  State  insurance  system. 
They  investigated  just  what  the  employers  had  paid,  and  they  also  carried  on  a 
careful  investigation  as  to  what  the  accidents  were,  and  how  long  they  were  disabled, 
and  various  things,  and  they  came  to  that  conclusion. 

The  Commissioner:  When  you  speak  of  State  insurance  let  us  see  what  that 
means.  It  has  been  suggested  here  it  is  not  State  insurance  but  the  management 
of  the  fund  by  the  State — the  collection  of  the  fund,  the  adjusting  of  the  claims  and 
the  administration  of  it.     I  suppose  that  is  a  form  of  State  insurance. 

Mr.  Dawson  :     That  is  what  we  mean  by  State  insurance. 

The  Commissioner:  Would  your  idea  be  that  the  State  should  guarantee  the 
payment  ? 

Mr.  Dawson:  The  State  virtually  does  that  through  its  power  of  taxation. 
It  does  not  mean  it  guarantees  it  to  be  paid  out  of  the  general  fund,  but  it  guar- 
antees it  will  require  the  employers  to  pay  enough  to  do  it. 

The  Commissioner:  Now,  if  the  legislators  find  themselves  in  this  position, 
that  a  new  proposition  was  being  made  involving  very  serious  consequences,  and 
that  some  countries  somewhat  similarly  situated  had  recently  adopted  laws  upon 
what  is  suggested  as  the  best  line,  and  came  to  the  conclusion  that  it  was  not  pru- 
dent to  put  a  law  upon  the  statute  book  this  year,  would  you  think  it  desirable 
that  there  should  be  a  temporary  law  getting  rid  of  these  three  doctrines  whicth 
stand  in  the  way  of  the  workmen  getting  compensation  in  the  majority  of  cases? 

Mr.  Dawson:     Personally  I  would  not. 

The  Commissioner:     You  think  it  would  be  better  to  wait? 

Mr.  Dawson  :  Yes.  I  do  not  think  it  is  needed  for  educational  purposes.  It 
seemed  to  me  then  and  it  seems  to  me  now.  too,  your  Lordship,  as  if  it  is  sub- 
verting our  ideas  of  justice.  In  other  words  I  regard  our  present  Employers' 
Liability  law  as  it  stands  with  very  slight  modifications,  if  any,  as  just  between 
man  and  man,  if  the  payment  was  finally  going  to  rest  on  the  shoulders  of  the  man 
who  wa's  going  to  pay  the  money  just  now.  Of  course  the  judges  of  the  courts 
in  your  country  and  in  our  country  and  in  Great  Britain  have  worked  ouut  the  prin- 
ciples of  that  law  from  principles  of  humanitarian  justice,  and  applicable  to 
every  relation  of  human  life.  The  one  mistake  that  the  judges  made  was  not  a 
mistake  that  arose  from  their  consideration  of  the  subject,  as  between  this  individual 
and  that  individual  man ;  it  was  an  error  which  arose  from  the  economic  nature 


422  MINUTES  OF  EVIDENCE:  Xo.  65 


of  the  employment,  and  so  one  which  could  not  be  foreseen  until  we  had  a  much 
greater  and  more  highly  organized  economic  development. 

The  Commissioner  :  There  should  have  been  the  same  economic  development 
in  the  law. 

Mr.  Dawson:  That  is  what  I  think,  but  that  economic  development  could  not 
very  well  be  made  by  the  judges. 

The  Commissioner:     They  have  done  a  good  deal. 

Mr.  Dawson:  They  have,  but  they  could  not  do  it  all.  We  have  a  lawyer 
in  the  Bar  Association  who  gave  a  minority  report,  which  I  will  be  very  glad  to 
leave  with  your  Lordship,  in  which  he  reasons  out  that  it  would  be  possible  for  the 
courts  to  do  the  whole  thing,  that  they  could  absolutely  subvert  the  existing  rules 
they  have  established  and  establish  entirely  new  ones  on  different  principles.  He 
was  a  minority  of  one  man. 

Mr.  Gibbons:  Do  not  some  employers  escape  liability  at  the  present  time  by 
making  rules,  and  the  breaking  of  those  rules  is  considered  contributory  negligence  ? 
Do  they  not  escape  by  making  rules  that  it  is  not  practical  to  carry  out,  and  which 
they  do  not  expect  to  be  carried  out? 

Mr.  Dawson:  I  could  not  answer  your  question  in  the  way  you  state  it  to 
me.  I  know  that  is  a  conceivable  thing,  but  that  it  is  actually  done  I  hesitate  to 
say.  I  fancy  his  Lordship  could  answer  the  question  very  much  better  than  I 
could. 

The  Commissioner:  What  has  impressed  Mr.  Gibbons  with  that  idea  very 
much  is  that  he  is  acting  for  the  'Street  Railway  employees,  and  he  is  thinking  of 
a  Street  Eailway  Company.  They  have  two  classes  of  persons  to  deal  with,  the 
employees  and  the  travelling  public. 

Mr.  Dawson  :     Precisely. 

The  Commissioner:  And  when  they  lay  down  these  rules  they  want  to 
guard  themselves  against  claims  of  passengers,  and  it  is  in  their  interests  there- 
fore to  have  a  set  of  rules  for  the  guidance  of  their  employees.  I  do  not  think 
that  any  company  deliberately  sets  to  work  to  make  rules  in  order  that  they  may 
catch  their  employees  if  any  accident  happens  to  them.  I  cannot  believe  that.  I 
think  it  is  rather  the  other  way,  in  dealing  with  the  double-headed  danger  that 
they  are  under,  that  these  rules  are  formulated. 

Mr.  Gibbons:  They  'must  know  that  under  the  operation  of  the  road  as  they 
want  it  operated,  it  is  impossible  to  carry  certain  of  the  rules  out.  They  say  a  trip 
must  be  made  in  a  certain  time,  and  they  state  you  must  go  at  such  a  rate  of  speed 
down  a  certain  hill,  and  you  must  bring  your  car  to  a  stop  at  such  a  place,  and  you 
must  have  it  under  control  at  other  places,  when  actually  they  must  know,  if  they 
ever  think  of  it,  that  you  could  not  do  it  in  probably  double  the  time  they  allow 
you.  The  law  must  be  broken,  and  in  case  of  an  accident  if  that  man  was 
running  down  hill  at  a  rapid  rate  of  speed,  and  the  car  jumped  the  track  and  he 
was  killed,  they  would  escape  liability  on  the  claim  that  he  was  breaking  that  rule 
and  violating  the  rules  of  the  company. 

The  Commissioner:  It  just  operated  the  other  way  in  a  case  that  was  tried 
the  other  day.  A  woman  was  suing  on  behalf  of  her  children.  Tier  husband  was 
bicycling  and  came  into  collision  with  a  car.  and  one  of  the  principal  grounds 
relied  upon  for  her  recovery  was,  thai  by  the  rnles  of  the  company  the  motorman 
when  lie  came  to  I  lie  grade  should  have  shut  off  his  power  and  let  his  car  coast 
down  the  incline.  Now.  I  ha  I  rule  was  not  made  to  catch  the  employee  at  all.  That 
rule  was  made  for  1  lie  protection  of  the  travelling  public. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  t23 

Mr.  Gibbons:  But,  your  Lordship;  suppose  the  accident  had  happened  to  the 
motorman  and  he  had  been  thrown  from  the  car,  would  it  not  have  worked  against 
the  employee?  j  ,      \ 

The  Commissioner:  II'  the  rule  was  that  going  down  the  grade  he  should 
shut  oil'  his  power  why  would  he  not  obey  that  rule? 

Mr.  Gibbons:  Because  possibly  he  could  not  make  the  time,  and  if  he  did 
not  they  would  not  have  any  use  for  him. 

The  Commissioner:  Your  Union  is  strong  enough  to  guard  against  that. 

Mr.  Dawson;  One  of  the  most  terrible  accidents  we  had  in  New  York  re- 
vealed that  it  was  the  fact  that  the  greatest  railroad  in  America  was  expecting  its 
employees  regularly  in  the  tunnel  there  to  run  past  signals  at  full  speed.  It  was 
a  thing  that  none  of  us  could  have  been  led  to  believe  until  it  came  out.  When  we 
looked  into  it  wre  found  the  New  York  Central  was  regularly  expecting  the  engin- 
eers to  send  the  train  down  that  tunnel  at  full  speed  past  those  signals. 

The  Commissioner:  What  was  the  object  of  the  rule? 

Mr.  Dawson:  I  think  the  rule  was  much  like  wdiat  has  been  stated.  It  was 
for  the  purpose  of  pointing  to  the  rules  in  case  of  ordinary  accidents,  but  they  did 
not  expect  such  a  terrible  thing  to  happen.     It  upset  their  calculations. 

Mr.  Bancroft  :  You  said  you  believe  the  Employers'  Liability  Act  of  the  pre- 
sent time  between  man  and  man  is  just,  with  certain  modifications? 

Mr.  Dawson:  If  it  was  really  a  question  between  John  Jones  over  here  and 
Frank  Robinson  over  there,  and  if  it  was  a  question  of  the  money  coming  out  of 
John  Jones'  pocket,  and  not  being  shifted  to  anybody  else  in  any  way,  I  do  not 
believe  that  the  reasonings  which  the  courts  have  used,  and  out  of  which  this  thing 
has  been  developed  are  on  the  whole  erroneous  or  do  wrong.  The  reason  why  the 
system  itself  is  wrong  is  because  what  we  have  really  been  doing  is  permitting 
John  Jones  over  there,  who  in  this  matter  is  only  an  intermediary  between  the 
community  at  large  as  consumers,  and  the  community  at  large  as  producers,  to  be 
dealt  with  and  treated  precisely  as  if  it  was  his  loss.  That  is  where  the  whole 
objection  is  and  just  on  that  account,  if  no  other.  I  would  not  be  in  favour  of  a 
workmen's  compensation  system  which  held  the  employer  individually  liable. 

The  Commissioner  :  I  may  tell  you  that  you  are  running  foul  of  the  funda- 
mental principles  that  Mr.  Bancroft  has  laid  down. 

Mr.  Bancroft:  He  just  spoke  in  the  way  I  wanted  him  to,  your  Lordship; 
Mr.  Wegenast,  I  think,  knows  that  too. 

I  would  like  to  point  this  out,  Mr.  Dawson,  where  it  has  ceased  to  be  John 
Jones'  liability  and  is  a  cost  to  the  consumer  then  that  law  becomes  economcially 
unjust,  doesn't  it  ?     That  is  why  we  have  all  these  changes. 

Mr.  Dawson  :  Oh  yes,  that  is  true,  but  it  should  be  replaced  by  a  just  law 
and  should  not  be  merely  destroyed.     As  to  the  kind  of  law  to  have  is  the  point. 

The  Commissioner:     It  is  left  with  the  individual  responsibility  remaining. 

Mr.  Wegenast:  We  have  here  in  addition  to  the  common  law  the  Chamber- 
lain law  of  1880,  throwing  on  the  employer  the  burden  of  accidents  for  defective 
appliances,  and  through  the  neglect  of  vice-principals,  and  that  sort  of  thing.  Now. 
would  you  say  this  is  too  strong  a  statement,  that  with  the  common  law  and  that 
Act  we  have  filled  out  the  full  measure  of  the  individual  employer's  responsibility 
as  a  matter  of  natural  justice?  Does  he  fulfil  his  whole  duty  as  an  individual 
employer  when  he  bears  the  burden  of  the  common  law  ? 

Mr.  Dawson  :  If  he  were  to  bear  the  burden.  He  does  not  do  so  now,  and 
that  is  not  the  actual  fact  under  any  system. 


+24:  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Wegenast:  What  I  mean  is,  would  you  put  him  under  any  further 
individual  liability?  Would  you  throw  upon  him  any.  further  liability  by  way  of 
abolishing  defences? 

Mr.  Dawson  :  I  would  not  say  there  were  no  changes  I  would  suggest,  because 
I  would  need  to  study  the  law  and  know  precisely  what  it  does,  but  I  will  say  that 
I  see  no  reason  why  on  the  theory  of  the  individual  liability  of  the  employer,  there 
should  be  any  serious  change  of  the  existing  law. 

The  Commissioner  :  Was  it  not  a  fundamental  error  to  say  a  man  when 
entering  an  employment  undertook  the  risks  of  that  employment  and  the  risks  off 
the  carelessness  of  his  fellow-servant. 

Mr.  Dawson  :  The  fellow-servant  rule  is  a  rule  that  even  from  the  other 
standpoint  we  would  all  agree  should  be  modified  considerably,  if  not  entirely.  The 
assumption  of  the  risk  I  am  not  quite  so  clear  about,  your  Lordship. 

The  Commissioner  :  When  it  is  compulsory  for  a  man  to  do  work  he  has  no 
choice.  He  has  got  to  work,  and  no  such  thing  enters  into  his  mind  that  he  is 
taking  any  risk  in  going  into  a  particular  employment,  unless  it  is  a  very  hazardous 
one. 

Mr.  Dawson  :  On  the  theory,  however,  that  it  is  a  question  whether  he  should 
lose,  or  the  individual  employer  should  lose,  I  am  not  at  all  clear  that  the  assump- 
tion of  the  risk  is  not  at  all  a  correct  proposition. 

The  Commissioner:  As  far  as  risks  that  are  incidental  to  the  trade  and 
that  are  not  due  to  the  negligence  of  the  employer  at  all  then  that  is  sound. 

Mr.  Dawson  :     It  seems  to  me  so. 

The  Commissioner  :  But  when  you  get  beyond  that,  and  when  you  say  that 
while  he  has  no  choice  of  the  man  with  whom  he  is  working,,  or  the  foreman  over 
him,  that  he  should  take  all  the  risk  of  their  carelessness,  it  seems  to  me  to  be  a 
fallacy. 

Mr.  Dawson  :  Oh  yes.  that  is  unsound,  and  it  has  been  greatly  modified  by  the 
courts  where  the  legislators  did  not  modify  it. 

The  Commissioner:  Then  there  will  be  all  sorts  of  trouble  even  under  this 
law  in  determining  where  an  accident  ai'ose,  or  an  occupational  disease  occurs  in 
the  course  of  and  arising  out  of  the  employment.  Have  you  anything  to  help  in 
the  solution  of  that  difficulty? 

Mr.  Dawson  :  I  think  I  have  something  but  I  am  afraid  if  I  enter  into  it 
to-night  it  will  leave  room  for  the  question  as  to  contribution.  I  personally  am  of 
this  opinion,  and  I  have  worked  this  out  largely  in  connection  with  my  assistants 
in  devising  those  plans  of  mutual  insurance  where  employees  and  employers  both 
contribute — I  am  personally  of  the  opinion  that  both  on  economic  and  State  grounds, 
communal  grounds,  and  also  for  the  purpose  of  avoiding  just  such  difficulties  as 
your  Lordship  lias  mentioned  that  we  ought  to  introduce,  taking  our  cue  from  the 
experience  of  other  nations  (I  am  speaking  now  of  my  own  country,  and  how  applic- 
able it  is  to  yours  I  leave  you  to  judge)  some  more  comprehensive  system  than  one 
that  is  confined  to  the  idea  of  occupational  accidents  only.  Now.  all  countries  that 
have  dealt  with  thai  question,  including  Great  Britain,  have  found  it  was  only  a  first 
step,  that  there  were  other  things  that  needed  to  be  done,  and  needed  to  be  done 
soon.  I  expressed  the  opinion  before  the  Federal  Commission  that  the  workingmen 
would  contribute  with  a  degree  of  relief  of  soul,  and  satisfaction,  and  even  soul  con- 
solation, that  that  Commission  absolutely  had  no  sense  of,  if  they  were  at  the  same 
time  covered  against  all  accidents,  and  still  better  if  they  could  be  covered  against 
all  sicknesses:  and  that  they  would  contribute  liberally,  T  know  this  by  experience. 
I  am  not  guessing  about  it.     I  see  no  reason  why  if  this  whole  subject  is  approached 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  425 

from  the  standpoint  of  the  Stair  itself  as  a  public  subject,  as  a  public  matter,  and 
not  as  a  mere  redressing  of  a  private  grievance  between  two  private  parties  in  the 

State,  why  we  should  not  also  deal  with  that  question.  A'ow,  for  instance,  to  take 
the  very  least  that  could  be  done  under  that  kind  of  an  idea,  why  should  we  have  any 
distinction  such  as  you  speak  of?  Why  should  we  not  create  a  fund  which  will  take 
care  of  the  family  of  the  man  in  the  event  of  an  accident  ?  We  will  leave  out  sick- 
ness entirely  at  the  present  moment,  and  just  speak  of  accidents.  If  that  were  done 
then  the  employee  would  be  covered  whether  he  was  hurt  through  anything  arising 
out  of  his  employment  or  not,  and  of  course  he  also  could  be  very  properly  called 
upon  to  contribute  a  sufficient  amount,  at  least,  to  cover  the  non-occupational  acci- 
dents, including  accidents  happening  on  Sunday  or  at  night,  and  when  lie  was  not 
anywhere  around  his  place  of  labour.  It  is  really  only  by  that  means  we 
accomplish  all  that  the  State  desires  to  see  accomplished,  which  is  to  see  that  the 
inhabitants  will  not  be  pauperized  by  the  happening  of  these  things  which  are  beyond 
their  own  power  to  prevent. 

The  Commissioner:  Suppose  a  case  like  this  happened.  I  think  it  was 
the  President  of  a  cement  factory  who  went  into  the  factory  and  an  explosion 
happened,  and  he  was  killed.  Is  there  any  reason  why  he  should  not  be  com- 
pensated also? 

Mb.  Dawson:  There  is  no  reason  if  that  class  desires  to  be  embraced  in  it. 
In  Bavaria  they  have  extended  the  insurance  to  farmers  so  as  to  cover  the  employing 
farmers,  and  it  is  so  satisfactory  it  has  already  started  in  other  countries. 

The  Commissioner:  In  Ohio  if  the  man  works  with  his  employees  he  is 
covered,  or  in  Washington  I  think  it  is.  Now.  wrould  it  be  actuarially  sound,  or  is 
there  any  objection  to  it  upon  any  other  ground,  to  permit  the  workmen  to  con- 
tribute and  give  him  what  you  are  speaking  of  now? 

Mr.  Dawson:     Why,  it  would  be  entirely  sound  actuarially,  and  very  desirable. 

Mr.  Bancroft  :     You  mean  to  cover  non-occupational  accidents  ? 

The  Commissioner  :     To  cover  all  accidents. 

Mr.  Bancroft  :  But  in  the  case  of  occupational  accidents  arising  out  of  their 
employment  it  is  not  thought  to  make  the  workmen  contribute,  is  it,  Mr.  Dawson? 

Mr.  Dawson:  In  my  judgment  if  the  benefit  was  confined  absolutely  to 
occupational  accidents  workmen  should  not  be  required  to  contribute.  Now,  that 
is  not  based  upon  any  actuarial  grounds. 

The  Commissioner:  That  is  your  broader  proposition,  that  a  workman 
should  not  contribute  at  all? 

Mr.  Dawson:  Yes,  but  he  obviously  should  contribute  if  it  covers  anything 
beyond  occupational  accidents. 

The  Commissioner:  Now,  all  these  accident  insurance  companies  have  an 
age,  65  or  70,  at  whiah  they  shut  you  off. 

Mr.  Dawson:     Yes. 

The  Commissioner:  If  they  find  that  essential,  why  is  something  like  it  not 
necessary  with  any  proper  State  insurance  system  ? 

Mr.  Dawson:  Well,  I  don't  think  it  is,  for  the  reason  that  there  again  you 
have  that  question  of  public  policy.  If  the  State  has  not  adopted  any  system  by 
which  it  pensions  its  workmen  who  have  reached  a  certain  age,  or  made  special 
arrangements  for  them,  and  if  it  expects  them  to  enter  into  industry  it  must  take 
a  broader  view  than  that. 

The  Commissioner  :  If  you  are  going  to  pension  a  workman,  why  should  you 
not  pension  everybody? 


426  MINUTES  OF  EVIDENCE:  No.  65 


Mr.  Dawson  :  I  do  not  think  that  I  have  any  particular  reason  to  give  why 
you  should  not,  I  do  not  know  that  I  am  quite  prepared  to  enter  into  the  sub- 
ject of  pensions,  but  I  mentioned  that  for  this  reason,  that  if  you  do  not  do  it 
and  the  workman  reaches  70  years  of  age  and  is  still  penniless,  and  has  responsi- 
bilities resting  upon  him  and  is  still  capable  of  labour,  he  should  work  as  a  matter 
of  State  policy. 

The  Commissioner  :  I  suppose  Mr.  Bancroft  would  be  insulted  if  I  said  I 
was  a  working  employee,  but  1  think  I  am  just  as  much  as  he  is. 

Mr.  Bancroft  :  We  have  not  any  objection  to  that. 

Mr.  Dawson:  My  own  view  concerning  pensions  would  certainly  embrace 
men  in  your  occupation. 


ELEVENTH  SITTING. 


Legislative  Building,  Toronto. 

Wednesday,  2ith  January,  1912,  8  p.m. 

Present:   Sir  Wtlliam  E.  Meredith,  Commissioner. 
Mr.  W.  B.  Wilkinson,  Law  Clerh. 

The  Commissioner:  Before  you  enter  upon  the  second  branch  of  the  inquiry, 
Mr.  Wegenast,  I  wish  to  ask  Mr.  Dawson  one  or  two  questions. 

What  would  you  think  of  allowing  the  Board,  whatever  the  Board  is,  to 
pass  upon  these  things,  to  make  a  deduction  from  the  amount  of  the  statutory 
allowance  in  case  of  serious  misconduct  on  the  part  of  the  employee  causing  the 
accident  ? 

Mr.  Dawson:  The  only  reason,  your  Lordship,  that  I  have  any  hesitancy 
about  answering  is,  in  our  slang  vernacular  over  in  the  States,  that  I  am  from 
Missouri.  In  other  words,  I  do  not  know  that  I  recall  any  place  where  it  has  been 
tried,  and  I  am  always  a  little  fearful  of  the  thing  which  has  not  been  tried,  and 
a  little  disposed  to  be  exceedingly  careful  about  it. 

The  Commissioner:  I  do  not  know  whether  it  is  in  your  system  or  not,  but 
in  the  British  Admiralty  system  there  is  a  rule  whereby  if  two  ships  are  to  blame 
the  loss  is  divided  ? 

Mr.  Dawson  :  Yes,  we  have  a  rule  of  comparative  negligence  now  in  the 
States  and  in  our  federal  legislation  relating  to  railroads. 

The  Commissioner:  Might  it  not  be  somewhat  on  the  same  lines  as  that? 

Mr.  Dawson:  I  should  think  if  it  were  well  guarded  it  might  work  all  right. 

The  Commissioner:  I  can  understand  the  hardship  from  one  point  of  view, 
if  the  employee  were  a  man  with  a  wife  and  family  and  were  killed.  Suppose  it  is 
some  young  fellow  who  has  no  claims  at  all  and  he  has  only  been  injured,  why 
should  there  not  be  power  to  say  to  him  :  You  brought  this  largely  upon  yourself 
by  your  serious  misconduct,  and  you  will  not  get  as  much  as  if  you  had  not  done 
that? 


1912  WORKMEN'S  COMPENSATION   COMMISSION'.  427 

Mr.  Dawson:  I  cannot  at  the  present  moment  think  of  any  serious  objection 
to  it,  but  I  have  not  known  it  to  be  tried.  I  do  not  feel  sure,  therefore,  how  it 
would  work,  but  I  do  think  that  it  would  have  many  things  to  commend  it. 

The  Commissioner:  I  suppose  off-hand  it  would  be  very  difficult  for  you  to 
express  even  a  very  general  opinion  upon  the  question  I  am  going  to  ask  you? 

Mr.  Dawson  :  Before  we  leave  the  last  question,  it  occurs  to  me  that  if  you 
put  up  a  S3rstem  which  has  no  other  means  of  encouraging  prevention  on  the  part 
of  cmplo}'ees  but  that,  it  might  serve  a  very  useful  office,  depending  very  largely 
on  how  wisely  it  was  administered,  and  how  infrequently  it  was  made  use  of. 

The  Commissioner:  Taking  a  Province  such  as  ours,  large  in  area,  and  part 
of  it  very  sparsely  occupied,  and  assuming  there  are  175,000  employees  of  all 
kinds,  what  would  you  think  roughly  would  be  the  cost  in  dollars  of  administrating 
a  system  such  as  you  have  outlined? 

Mr.  Dawson  :  If  your  Lordship  will  permit  I  would  like  to  give  that  some 
attention  and   communicate  with  you. 

The  Commissioner:  Very  well.  If  a  Provincial  Board  were  established  to 
deal  with  this,  of  how  many  members  should  it  be  composed,  in  your  judgment? 

Mr.  Dawson  :  That,  of  course,  is  largely  a  question  of  the  experience  in 
different  countries.  In  our  country  we  generally  find  a  large  Board  is  unwieldy, 
and  I  should  say,  according  to  our  experiences,  not  more  than  five  persons,  and 
almost  preferably  three. 

The  Commissioner:  Then  what  would  be  the  best  material  out  of  which  to 
constitute  such  a  Board,  supposing  it  were  three  men  ? 

Mr.  Dawson:  I  should  say  unquestionably  one  person  distinctly  representing 
the  employer  class  and  one  distinctly  representing  the  employee  class,  and  if  there 
were  only  three  the  third  would  be  some  person  whose  judgment  as  an  attorney  _ 
the  administration  would  have  confidence  in.     If  it  were  five  I  would  be  disposed 
to  add  for  one  of  the  others  a  physician. 

The  Commissioner:  What  would  you  think  of  a  man  with  some  actuarial 
knowledge,  or  would  you  make  him  an  adviser  of  the  Board  ? 

Mr.  Dawson:  That  would  be  a  capital  thing  to  do,  if  you  found  somebody 
who  knew  something  about  it  from  a  public  standpoint.  The  actuaries  who  are 
trained  for  private  insurance  frequently  have  a  great  deal  to  unlearn  before  they 
are  adaptable,  but  a  young  man  who  has  been  well  trained,  or  a  man  who  has 
been  full  of  this  subject  and  has  ideas  upon  it  and  has  had  some  mathematical 
experience,  and  preferably  some  legal  experience  too,  so  as  to  know  what  he  is 
dealing  with,  would  be  a  valuable  man. 

The  Commissioner:  Would  you  want  to  be  the  third  man  in  a  trio  such  as 
you  have  suggested? 

Mr.  Dawson:  If  I  were  living  here. 

The  Commissioner:  With  a  labour  man  on  one  side  and  an  employer  on  the 
other,  would  you  not  be  in  hot  water  all  the  time? 

Mr.  Dawson  :  I  do  not  think  so.  1  might  give  you  a  little  illustration  con- 
cerning that.  When  I  leave  you  I  am  going  to  Providence,  Rhode  Island,  for  the 
eleventh  investigation  of  a  mutual  society  organized  for  the  employees  of  a  large 
traction  company  covering  the  entire  state.  Senator  Aldrich  was  Chairman,  and 
men  of  almost  equal  standing  composed  the  committee.  When  organized  it  made 
provision  for  a  board  of  two  representatives  by  the  public  and  three  appointees  by 
the  company,  one  of  whom  must  be  the  treasurer  of  the  Traction  Company.     The 


428  MINUTES  OF  EVIDENCE:  No.  65 

experience  has  been  that  the  men  are  so  fair,  and  even  at  times  so  critical  about 
paying  claims  that  the  three  members  of  that  board  representing  the  company 
not  infrequently  leave  the  entire  settlement  to  those  two  men,  and  rarely  is  more 
than  one  representative  of  the  company  present. 

The  Commissioner:  Is  there  any  contribution  by  the  men  to  the  fund? 

Mr.  Dawson  :  Yes,  but  it  is  fixed  and  could  not  be  increased,  no  matter  how 
much  the  claims  were.  I  personally  would  be  entirely  willing  to  act  as  the  third 
member,  if  I  were  asked  to  and  was  living  here. 

The  Commissioner:  Would  your  scheme  involve  bringing  within  its  range 
shop  employees,  such  as  in  stores? 

Mr.  Dawson  :  The  experience  in  most  countries  is  it  is  certain  to  be  extended 
to  those  employees.  There  surely  is  no  principle  which  would  exclude  them,  and 
unless  there  is  some  objection  that  occurs  to  you  that  I  do  not  think  of,  I  should 
say  they  should  be  included. 

The  Commissioner:  Could  there  be  a  rough  provision  for  a  first  payment 
provided  for,  to  be  adjusted  at  the  end  of  the  year?  Could  it  be  done  without 
much  calculation  ? 

Mr.  Dawson:  It  would  require  quite  a  good  deal  of  careful  calculation,  the 
main  purpose  being  to  be  sure  it  would  be  enough,  but  it  could  be  done,  and 
undoubtedly  could  be  safely  done,  especially  if  you  did  not  set  up  a  capitalized 
value  scheme.  If  you  did  that,  then  it  would  involve  the  scientific  accuracy  of  the 
whole  proposition,  and  it  would  be  much  harder. 

The  Commissioner:  Mr.  AVegenast  seems  to  be  wedded  to  the  idea  that 
there  should  be  a  grouping  of  trades,  and  he  suggests,  as  I  understand  it,  large 
groups,  such  as  one  including  the  metal  people.  Would  there  not  be  great  varia- 
tions in  the  hazards  in  the  different  branches  of  the  metal  trades? 

Mr.  Dawson  :  Yes,  but  I  do  not  understand  from  what  he  has  said  to  me 
that  he  would  expect  the  entire  metal  trades  would  be  charged  the  same  rate,  but 
only  that  in  considering  these  trades  they  should  be  dealt  with  in  groups.  Of 
course  I  do  not  know  anything  of  the  testimon}r  previously  taken.  There  is  no 
question  that  the  metal  trades,  for  instance,  would  cover  hazards  all  the  way 
from  very  light  ones  with  very  small  rates,  up  to  very  heavy  hazards  with  very 
heavy  rates. 

The  Commissioner:  What  is  the  advantage  of  that  system  over  a  system 
which  differentiates  according  to  the  hazard  of  the  different  businesses? 

Mr.   Dawson  :   If  you  are  to  deal  with  it  virtually  on  the  assessment  plan 
there  is  this  difference,  that  if  the  aggregate  losses  in  your  metal  trades  exceed 
the  losses  that  you  have  figured  on  in  making  your  rates,  then  you  can  increase 
all  rates  in  the  metal  trades  by  application,  and  it  will  probably  work  out  reason- 
ably well.     Tf  we  undertake  to  grade  insurance  by  hazard — we  are  only  really 
guessing  ;is  In  whether  they  have  the  same  hazard  or  not,  basing  our  guess  upon 
experience  in  countries  where  the  real  facts  may  be  different  from  here.     I  found, 
for  instance,   in   my   investigation   of  rates   and   costs   that  certain   classes  would 
have  approximately  the  same  hazard   in   Norway,  and   a   very  different  hazard  in 
Germany,  and  when  I  examined  into  it  T   found  it  was  because  of  the  difference 
of  the  ways  the  two  trades  were  carried   on   in  those  countries.     In  Norway  it 
would  be  carried  on  in  relatively  small  shops,  and  in  Germany  it  had  grown  into 
a    moderately   centralised    trade,   run    under   greater  pressure   and    with    powerful 
machinery,  and  so  on,  and    1   think  therefore  a  classification  of  hazards  for  the 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  L29 

purpose  of  assessment  would  not  work  out  well.  Let  us  assume,  for  example, 
that  we  find  by  investigation  of  the  rates  now  charged  in  Norway  ot  in  England, 
for  ordinary  employers'  liability,  that  a  manufacturer  of  clocks,  a  retail  druggist. 
and  a  hardware  dealer  exhibited  the  same  hazard.  Suppose  during  the  year 
it  shows  on  account  of  heavy  looses  among  the  retail  druggists  that  the  aggregate 
losses  of  that  group  ran  beyond  what  we  had  estimate:!  and  we  wanted  moie  money 
from  them,  1  think  there  would  be  very  great  complaint  from  the  hardware 
dealer  and  the  manufacturer  of  clocks  about  that. 

The  Commissioner:  Would  that  not  all  be  met  by  readjusting  the  rates? 

Mr.  Dawson  :  Yes,  but  the  readjustments  cannot  be  made  every  year.  They 
must  be  made  for  a  longer  period.  But  you  may  have  to  collect  a  little  more 
money.  On  the  other  hand,  if  you  can  group  together  all  the  metal  trades  they 
understand  there  is  relationship  among  themselves,  and  if  it  happens  that  the 
hardware  dealer  contributes  a  heavy  loss  that  year  they  are  willing  to  wait  for 
five  years,  for  instance,  to  get  the  readjustment. 

The  Commissioner:  Would  you  call  a  man  who  is  a  vendor  of  metals  in  the 
metal  trade? 

Mr.  Dawson:  I  think  so.  I  would  make  it  a  broad  grouping  so  that  people 
who  trade  with  one  another  and  have  some  similarity  would  recognize  that  re- 
lationship. 

The  Commissioner:  Would  it  be  necessary  to  enumerate  what  particular.in- 
dustries  belonged  to  these  classes? 

Mr.  Dawson:  It  would  in  a  broad  way,  and  then  if  possible  give  power  to 
your  Commission  to  do  the  final  grading. 

The  Commissioner:  T  suppose  in  ironworkers  there  would  be  a  great  diller- 
ence  between  a  bridge  builder  and  a  blacksmith  ? 

Mr.  Dawson  :  Yes.     Those  two  will  not  probably  fit. 

The  Commissioner:  You  would  put  him  in  the  same  class? 

Mr.  Dawson:  Merely  for  determining  whether  the  aggregate  amount  of  pre- 
mium you  get  from  that  whole  class  is  sufficient.  Bridge  builders  alone  would 
form  too  small  a  class  to  give  any  real  average.    That  is  the  purpose  of  it. 

I  would  like  to  speak  a  little  on  classification.  For  instance,  in  Germany 
they  class  in  the  drug  and  chemical  trade  everything  from  the  ordinary  retail 
chemist  who  has  not  any  hazard  at  all  to  amount  to  anything,  to  the  manufac- 
turer of  high  explosives.  They  are  all  in  one  group  and  they  have  their  rate  of 
assessment  fixed  and  that  is  fixed  for  a  term.  Usually  in  Germany  it  is  for  fixe 
years.  Then  the  aggregate  losses  in  that  whole  class  at  the  end  of  the  year  are 
assessed  according  to  those  pre-arranged  rates  of  assessment  upon  all  the  mem- 
bers of  the  group.  The  retail  druggist  has  a  very  low  rate  of  assessment  and  the- 
high  explosive  man  a  very  high  rate,  but  the  total  amount  of  assessment  they  pay 
is  determined  after  all  by  the  aggregate  losses  for  the  group  for  the  year.  That 
is  the  idea. 

The  Commissioner  :  It  would  make  great  trouble  in  making  your  assess- 
ment if  you  sub-divided  them  into  so  many  classes? 

Mr.  Dawson  :  You  can  leave  them  all  in  one  class.  In  the  Province  of 
Ontario  it  might  work  all  right.  I  am  not  at  all  positive  on  that.  You  might  do 
that.  I  judged  by  something  Mr.  Wegenast  said  that  his  notion  was  if  those  in? 
related  industries  were  tied  up  together  in  some  way  they  would  exercise  a  great 
deal  of  influence  upon  one  another  for  prevention  purposes.  I  think  that  is  his. 
idea. 


430  MIXUTES  OF  EVIDENCE:  Xo.  65 


The  Commissioner  :  Why  wouldn't  the  mass  exercise  the  same  on  one 
-another? 

Mr.  Dawson:  The  mass  bears  little  relationship  with  one  another,  your  Lord- 
ship. The  people  engaged  in  the  metal  trade  do  come  somewhat  into  touch  all 
the  way  through,  for  instance. 

The  Commissioner  :  Of  course  this  would  he  largely  experimental,  and  you 
are  only  feeling  your  way  as  to  the  best  method  all  the  time,  I  suppose. 

Mr.  Dawson  :  Xo  doubt,  but  in  general  the  principles  of  the  German  method 
have  worked  best. 

Mr.  Wegenast  :  I  wanted  to  ask  Mr.  Dawson  whether  I  was  correct  in  this 
theory  which  1  am  propounding  in  the  latter  portion  of  my  brief,  that  the  remedy 
for  all  sorts  of  discrimination  in  sub-classification.  His  Lordship  has  raised  the 
question  whether  by  throwing  the  same  burden  on  the  careful  employer  as  on  the 
careless  employer  would  not  be  discrimination,  and  my  answer  to  that  was  to  be 
that  you  could  put  the  careless  employer  in  a  different  class.  You  could  group 
the  industries  into  as  many  sub-classes  as  it  was  found  advisable,  and  that  the 
remedy  for  every  ill  in  the  shape  of  discrimination  or  in  the  shape  of  defective 
means  of  prevention  was  sub-classification.  What  do  you  say  to  that,  Mr. 
Dawson  ? 

Mr.  Dawson  :  They  do  in  Germany  without  hesitation  apply  a  discriminat- 
ing rate  of  assessment,  as,  for  instance,  to  an  iron  moulder  who  has  antiquated 
machinery  and  is  unable  or  unwilling  to  put  in  the  latest  and  best  means  of 
prevention.  1  think  they  would  also  very  likely  discriminate  against  him  if  he 
retained  in  his  employment  some  superintendent  or  inspector  to  whose  carelessness 
disasters  had  repeatedly  been  traced,  although  about  that  I  am  not  certain.  I 
think  if  any  such  discrimination  is  undertaken,  however,  it  must  be  with  the 
.greatest  possible  caution,  because  the  mere  fact  that  a  particular  employer  has 
had  more  losses  than  another  is  not  proof  that  he  is  greatly  careless.  The  number 
<>f  employees  is  usually  such  that  there  is  not  a  safe  average  in  his  employment 
from  year  to  year,  or  perhaps  even  from  decade  to  decade,  and  he  may  have  been 
i in i re  careful  than  the  next  man  who  had  few  losses  according  to  the  fact. 

Mr.  Wegenast:  In  the  metal  trades  it  would  be  quite  practicable  to  arrange 
the  sub-classes  in  such  a  way  that  the  hardware  dealer  would  pay  say  one  quarter 
the  rate.  He  would  be  put,  say,  in  the  third  class,  and  pay  one  quarter  the  rate 
that  the  manufacturer  of  bolts  would  pay. 

Mr.  Dawson:  Quite  so.  The  exact  proper  gradations  as  nearly  as  they  could 
Ibe  arrived  at  from  previous  experience  would  be  applied. 

Mi;.  Wegenast:  I  have  observed  in  the  Xorwegian  system  the  risks  were 
divided  into  sixteen  classes,  and  the  first  three,  A,  B,  and  C,  are  not  yet  filled, 
and  I  have  .uuessed  that  the  idea  might  be  that  those  three  classes  were  left  empty 
to  hold  out    something  for  emulation. 

Mi;.  Dawson:  To  encourage  making  such  improvements  that  they  would  get 
into  them. 

Mi;.  Wegenast:  So  that  Class  •'  I>"  might  try  to  get  into  Class  "A"  ? 

Tim:  COMMISSIONER:  That   would   lie  only  by  trades. 

Mk.  Wegenast:     That  is  within  the  trades.     These  are  sub-classes  within  the 

trades,  I   believe. 

Mi;.  Dawson:  The  classification  that  is  referred  to,  your  Lordship,  is  the 
Grouping   tor   purposes  of  assessments  of  trades  or  businesses  within   the  trades, 


1912  WORKMEN'S  COMPENSATION  COMMISSION'.  431 

classified  according  to  hazard.  The  Austrian  system  has  the  same  thing  with 
classifications  numbered  from  "1"  up  to  a  high  number,  according  to  the  estim- 
ated hazard. 

Mr.  WEGENAST:  So  that  within  the  classification  of  industries  you  have  sub- 
classifications  by  hazard? 

Me.  Dawson  :  That  is  right. 

The  Commissioner:  While  it  might  be  practicable  under  the  German  system 
to  allot  an  amount  on  account  of  bad  machinery,  or  some  of  the  causes  you  have 
mentioned,  there  would  be  great  difficulty  in  doing  that  under  a  Board  such  as 
we  have  been  talking  about. 

Mr.  Dawson  :  They  did  it  in  Norway  where  they  have  a  State  system  with 
a  Board.  They  did  it  in  this  manner.  The  Board  is  given  the  privilege  of  re- 
ducing the  rate  not  beyond  a  certain  percentage  below  the  average  that  is  fixed 
for  that  occupation  or  trade,  and  also  of  increasing  it  not  beyond  a  certain  per- 
centage, the  first  of  those  being  because  of  improvements  in  prevention,  and  the 
second  as  a  penalty  for  the  opposite. 

The  Commissioner  :  That  would  involve  an  investigation  into  the  plant  of 
the  particular  manufacturer? 

Mr.  Dawson  :  Yes,  but  that  is  a  very  important  thing  for  the  Board  to  have 
done  by  somebody. 

The  Commissioner:  It  is  a  pretty  big  undertaking? 

Mr.  Dawson  :  Not  so  very.  If  you  could  unite  your  present  factory  inspectors 
with  it,  you  see  you  would  only  be  doing  the  same  work  as  is  being  done  now. 

The  Commissioner  :  It  depends  on  how  many  factory  inspectors  you  have. 

Mr.  Dawson:  You  might  have  to  increase  the  inspectors,  but  you  would  get 
better  work. 

The  Commissioner  :  Now,  what  would  your  idea  be  as  to  the  finality  of  the 
decision  of  the  Board? 

Mr.  Dawson  :  Before  answering,  might  I  ask  is  it  the  idea  that  the  Board 
would  first  fix  the  award? 

The  Commissioner:  Assume  that.  If  the  parties  have  agreed  of  course 
there  is  nothing  to  be  done,  I  suppose,  except  to  see  that  it  is  carried  out. 

Mr.  Dawson:  The  parties  would  be  the  Board  on  one  side  and  the  injured 
on  the  other,  so  it  would  be  a  question  of  the  Board  fixing  it.  If  it  is  to  be  fixed 
in  the  first  instance  by  the  Board,  according  to  experience  it  would  be  wise  to 
have  some  body  to  which  an  appeal  could  be  made. 

The  Commissioner:  Of  what  character?     What  kind  of  an  appeal? 

Me.  Dawson:  The  way  they  do  it  in  Norway,  which  is  most  closely  similar 
to  what  you  have  suggested,  is  instead  of  the  Board  passing  upon  it  in  the  first 
instance  the  manager  of  the  fund,  who  gives  his  whole  time  to  it  and  is  on  the 
job  every  minute,  does  that,  and  there  is  an  appeal  from  him  to  the  Board.  I  think 
that  would  be  satisfactory. 

The  Commissioner:  And  make  that  final? 

Mr.  Dawson  :  Yes. 

The  Commissioner:  Very  few  questions  of  law  could  arise,  I  suppose,  under 
that  system? 

Mr.  Dawson:  Of  course  in  no  country  do  they  make  that  final  as  to  the 
construction  of  the  law  itself. 

The  Commissioner:  Upon  questions  of  law  there  would  be  an  appeal? 


i32  MINUTES  OF  EVIDENCE:  Xo.  65 

Mr.  Dawson  :     They  do  not  ask  the  Board  as  to  the  statutory  construction 
anywhere. 

The  Commissioner:  You  must  not  leave  a  hole  or  they  will  drive  a  coach 
and  four  through  it. 

Mr.  Dawson:  I  should  think  not  if  nothing  was  left  but  the  construction  of 
the  act  itself.  For  instance,  if  the  amount  of  the  award,  if  any  award  was  to 
be  made,  and  so  on,  were  left  untouched  entirely  and  were  not  subject  to  review 
by  the  court,  and  it  became  purely  a  question  of  the  construction  of  the  statute 
as  to  whether  it  was  applicable  to  his  case  at  all — — . 

The  Commissioner:  That,  in  effect,  is  the  British  system.  There  there  is 
no  appeal  except  on  a  question  of  law  from  the  judgment  of  the  County  Court, 
and  a  good  many  cases  have  gone  up  to  the  House  of  Lords  upon  questions  of 
Jaw.  Now,  if  you  have  it,  as  probably  it  would  be  necessary  in  any  such  systems  at 
present,  that  the  accident  must  arise  out  of  and  in  the  course  of  the  employment, 
that  is  a  question  that  raises  the  most  difficulty. 

Mr.  Dawson  :  I  know  it  is. 

The  Commissioner:  That  would  lie.  T  suppose,  a  question  upon  which  you 
think  there  could  be  an  appeal  to  the  courts?    Or  do  you  think  that? 

Mr.  Dawson:  That,  after  all,  is  hardly  a  question  of  statutory  construction. 
It  is  a  question  of  fact  as  to  whether  this  was  or  was  not  during  the  course  of 
employment. 

The  Commissioner  :  The  House  of  Lords  did  not  think  so.  They  treat  it  as 
a  question  of  law. 

Mi;.  Dawson:  Is  that  necessarily  a  question  of  statutory  construction? 

The  Commissioner  :  No,  it  is  the  application  of  the  statute  to  the  particular 
case. 

Mr.  Dawson  :  Yes,  but  what  I  suggested  was  that  only  statutory  construc- 
tion should  go  to  the  courts. 

The  Commissioner:  That  is  a  very  limited  field. 

Mr.  Dawson  :  That  is  it.  It  should  be  a  very  limited  field.  But  supposing 
your  Commission  was  obviously  exceeding  its  powers  and  was  acting  in  an  arbi- 
trary manner  not  called  for  by  law,  and  there  were  certain  evidences  of  it?  Sup- 
posing they  were  putting  an  interpretation  upon  the  statute  itself  which  appeared 
to  be  erroneous? 

The  Commissioner  :  Illustrate  that  by  a  concrete  case,  if  one  occurs  to  you  ? 

Mr.  Dawson  :  I  do  not  know  that  I  can  do  it.  I  am  giving  it  very  roughly, 
I  am  sure. 

The  Commissioner  :  Perhaps  it  might  be  as  to  whether  the  man  was  en- 
titled to  so  much  money,  whether  he  came  within  the  act? 

Mr.  Dawson:  "Well,  I  would  not  really  like  to  give  a  concrete  instance.  I 
haven't  any  in  mind.  I  am  told  in  these  countries  where  they  have  provided  that 
only  question  of  statutory  construction  could  go  to  the  courts,  as  I  understand 
to  be  the  case  in  Norway,  that  almost  no  cases  have  gone  there. 

The  Commissioner:  Then  just  one  more  question.  You  have  heard  Mr. 
Wegenast's  statement  and  you  know  pretty  well  what  it  is.  I  would  like  to  know 
if  there  is  any  joker  hidden  anywhere  in  his  proposition? 

Mr.  Dawson":  I  am  sorry  to  say  that  I  do  not  know  what  is  his  proposition 
altogether.  I  have  not  seen  any  measure  drawn  up,  and  therefore  I  have  no  know- 
ledge of  how  anything  of  that  sort  would  come  in.     So  far  as  the  general  situa- 


1912  WORKMEN'S  COMPENSATION   COMMISSION'.  433 

lion  is  concerned,  after  you  have  concluded,  if  yon  do  conclude  that  the  principle 
upon  which  compensation  should  he  paid  should  be  changed,  when  a  change  is 
made  it  should  he  such  as  to  call  for  payments  by  the  employers  according  to  the 
hazard  of  the  industry,  and  that  the  question  of  how  the  money  shall  be  raised, 
whether  assessed  to  provide  capitalized  values  or  on  a  current  cost  basis,  and  the 
(piot  ion  as  to  how  the  fund  should  he  administered  is  one  necessarily  in  which 
the  employers,  if  they  are  the  only  ones  to  contribute,  will  have' a  paramount  in- 
terest next  to  the  general  public  itself,  and  a  met  hod  which  will  impose  tem- 
porarily the  least  burden  on  industry,  and  in  the  end  no  greater  burden  than  any 
other  method,  the  payment  of  claims  themselves,  and  which  will  impose  the  least 
burden  of  cost  of  administration,  is  obviously  for  the  interest  of  the  employers 
first;  but  second,  and  much  more  important,  to  the  people  of  Ontario  and  Canada 
in  general,  because  it  is  just  so  much  waste  obviated,  and  it  is  just  so  much  money 
kept  in  the  industry,  which  if  withdrawn  from  it  will  not  readily  find  its  way  back 
into  those  channels,  and  I  know  of  no  joker  or  trick  which  could  be  accomplished 
under  it,  nor  do  I  suspect  any  desire  whatever  on  the  part  of  Mr  Wegenast  or  his 
associates  to  do  so.  I  would  like  to  say  in  that  connection,  your  Lordship,  that  I 
am  not  here  under  a  retainer  in  the  ordinary  sense  at  all,  as  you  well  know,  and 
1  shall  he  very  glad  when 'the  bill  is  framed  to  examine  it  carefully  for  you,  and 
I  give  you  my  honour  T  will  point  out  any  jokers  that  I  can  see. 

The  Commissioner  :  The  manufacturers  have  nothing  to  do  with  framing 
the  hill. 

Mi;.  Dawsox  :  But  if  through  the  ideas  they  put  forward  there  should  be  any- 
thing that  might  work  that  way  I  will  be  very  glad  to  point  it  out  for  you. 

The  Commissioner  :  I  know  you  will  be  fair  according  to  your  lights,  and 
that  is  the  best  that  any  of  us  can  do. 

The  British  Act,  and  I  fancy  other  acts,  exclude  from  the  benefit  of  the 
compensation  casual  employees.     What  is  your  idea  about  that? 

Mr.  Dawsox:  I  think  the  only  reason  that  any  act  does  that  is  because  of 
the  great  difficulty  of  covering  them.  It  is  not  a  good  thing  from  the  community 
standpoint  to  exclude  them,  but  per  contra  it  is  almost  impossible  to  include  them 
and  collect  a  premium.  It  is  difficult  to  find  them,  and  still  more  difficult  to  find 
the  men  who  employ  them. 

The  Commissioner:  Do  you  understand  under  a  system  by  which  the  rate  is 
based  upon  the  wage-bill  that  the  wages  paid  to  casual  employees  are  excluded? 

Mr.  Dawson  :  Virtually  so,  yes.  You  see  the  casual  employee  is  very  much 
in  the  position  of  a  self-employed  person.  The  distinction,  for  instance,  between 
a  shoemaker  who  is  doing  a  job  for  you  and  you  pay  him  for  it,  or  cobbling,  and  the 
boy  whom  you  meet  in  the  street  and  ask  to  run  an  errand  for  you  and  hand  him 
a  quarter,  is  after  all  very  little.  They  are  both  really  self-employed  people.  Tt 
is  possible  to  cover  them,  but  it  is  difficult,  and  in  the  first  stages  of  a  thing  like 
this  I  should  think  it  would  be  exceedingly  difficult. 

The  Commissioner  :  Supposing  they  brought  in  two  or  three  men  for  a  week 
or  ten  days? 

Me.  Dawson:  They  are  not  casual  employees. 

The  Commissioner:  Why  not  within  that  definition?  Is  that  not  what  it 
means  ? 

Mr.  Dawson  :  It  should  be  defined  so  as  to  include  them. 
28  l. 


434  MINUTES  OP  EVIDENCE:  No.  65 

The  Commissioner  :  It  seemed  to  me  the  British  Act  was  pretty  loose  upon 
that  point. 

Me.  Dawson:  It  is  loose. 

The  Commissioner  :  I  thought  the  idea  was  if  a  man  came  in  to  work  a  day 
or  so. 

Mr.  Dawson  :  A  day,  or  an  hour,  or  something  like  that. 

The  Commissioner:  Then  he  was  not  within  the  protection  of  the  act? 

Mr.  Dawson:  I  have  not  studied  the  construction  of  the  British  Act  par- 
ticularly in  that  regard,  but  I  suppose  that  would  be  its  construction. 

The  Commissioner:  1  have  never  noticed  a  case. 

Mr.  Dawson  :  I  am  not  familiar  with  it. 

The  Commissioner:  Then  another  question,  and  this  is  the  last  upon  this 
branch.  Supposing,  as  will  probably  happen,  but  I  hope  it  will  be  long  before  it 
comes,  there  is  a  very  serious  depression,  what  effect  would  that  have  upon  a 
scheme  of  this  kind? 

Mr.  Dawson:  That  is  the  purpose  of  collecting  this  reserve.  Suppose  you 
•collect  ten  or  fifteen  per  cent.  (I  think  in  Germany  it  is  about  eleven  per  cent.) 
extra,  beyond  the  requirements  each  year,  then  if  a  depression  comes  it  means  the 
wage-bill  for  that  year  is  much  lower,  and  they  will  draw  from  that  reserve  a 
sufficient  amount  to  cover  the  assessments  that  would  be  levied  upon  the  remaining 
wage-bill,  such  as  would  have  been  paid  if  the  time  were  as  usual. 

The  Commissioner:  Has  that  been  found  adequate? 

Mr.  Dawson  :  The  amount  has  been  unquestionably  adequate,  but  they  have 
not  called  upon  it  for  a  dollar.  Since  1881-  they  have  had  no  serious  depression. 
That  is  a  remarkable  record,  but  it  is  a  correct  one. 

Mr.  Kingston  :  I  put  a  question  to  you  last  night  with  reference  to  the  en- 
forcing of  collection  of  premiums  in  the  case  of  a  number  of  small  employers,  and 
I  suggested  if  it  might  not  possibly  be  we]l  to  say  that  unless  the  premium  is  paid 
the  benefit  of  the  act  will  not  be  applied.  Your  answer  rather  indicated  that  I 
had  reference  to  the  employee,  but  I  meant  to  suggest  in  the  case  of  an  employer 
if  he  did  not  pay  his  premium  might  he  not  be  left  open  to  the  old  common  law 
action  against  him,  and  make  it  a  sort  of  negative  compulsion.  If  he  does  not 
pay  his  premium  in  accordance  with  the  schedules  of  the  act  he  will  not  have  the 
benefit  of  settlement  for  his  accidents  under  the  act. 

Mr.  Dawson:  What  they  do  in  Germany  is  well  worth  telling,  and  perhaps  it 
may  help  to  answer  the  question.  If  an  employer  has  failed  to  pay  the  premium, 
and  also  if  he  has  failed  to  deduct  the  sickness  insurance  premium  from  the  wages 
and  pay  it  over  to  the  sickness  society,  the  employee  is  insured  precisely  as  if  it 
had  been  paid.  During  the  first  thirteen  weeks  he  is  covered  by  the  sickness 
society,  and  the  communal  society  takes  care  of  him  just  the  same.  After  the  first 
thirteen  weeks,  if  he  is  still  disabled,  the  Employers'  Association  takes  it  up  and 
they  take  care  of  him.  Then  they  pounce  down  on  his  employer  and  find  how  much 
premium  he  should  have  paid,  and  they  charge  to  him  first  the  premium  he  should 
have  paid,  and  secondly  a  fine  which  is  an  increasing  one  if  lie  has  played  this 
trick  before,  and  thirdly  all  the  money  they  have  had  to  pay  on  account  of  his 
employee,  including  the  present  value  of  what  they  think  they  are  going  to  have 
to  pay  in  the  future.  One  or  two  such  experiences  generally  make  an  employer 
very  amenable. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  435 

Mr.  Kingston  :  Supposing  the  employer  is  very  poor  or  'practically  insolvent 
and  it  is  impossible  to  collect  that?    Suppose  he  is  execution  proof? 
Me.  Dawson:  There  are  some  losses  in  all  countries. 

The  Com  mission kk:  The  general  fund  would  have  to  lose  then,  of  course. 
Mr.  Kingston:  You  are  doubtless  more  or  less  familiar  with  the  classifica- 
tion adopted  by  the  liability  companies? 

Me.  Dawson  :  I  am  somewhat  familiar,  not  extremely  so. 
Me.  Kingston:  Do  you  see  any  difficulty,  for  example,  in  the  first  year  in 
starting  this  business  off,  instead  of  analyzing  the  whole  situation  from  an  actu- 
arial point  of  view  to  adopt  the  employers'  liability  rates  as  the  basis,  and  then  do 
the  same  as  the  employers'  liability  people  do,  at  the  end  of  the  year,  ask  that  the 
excess  premium  he  paid.     You  undersand  the  system? 

Mr.  Dawson  :  Yes,  perfectly.  I  might  give  a  little  explanation  of  what  I  do 
understand.  The  suggestion. is  that  the  rate  of  assessment  be  fixed  at  the  rate  of 
premium  now  charged  by  the  Employers'  Liability  Company,  that  to  be  computed 
on  so  much  pay-roll  for  the  year,  and  then  at  the  end  of  the  year,  if  the  pay-roll 
has  been  more,  collect  an  additional  amount,  and  if  it  has  been  less  a  rebate.  This 
might  be  all  right.  Whether  it  would  be  or  not  would  depend  somewhat  on  cir- 
cumstances. Personally,  I  would  prefer  to  know  precisely  what  the  benefits  were 
going  to  be  and  to  have  an  opportunity  to  compare  with  experience  the  result,  so 
as  to  make  it  clear  to  my  mind  that  it  probably  would  be  fair  as  between  the 
different  industries  if  it  were  done  that  way  under  these  benefits. 

The  Commissioner:  Would  that  not  exclude  this  current  cost,  because  these 
companies  charge  a  premium  to  cover  the  capital  cost? 

Mr.  Dawson  :  No.     At  present,  you  know,  they  charge  a  premium  only  suffi- 
cient to  cover  the  employers'  liability  under  the  existing  law. 

The  Commissioner:  I  know,  but  still  it  is  to  cover  the  capital  expenditure. 
Mr.  Dawson  :     That  might  not  be  larger  than  is  required  conceivably,  besides 
it  was  my  suggestion  that  it  be  made  somewhat  larger,  safely  larger,  than  we 
thought  would  be  required,  so  that  you  would  not  have  a  situation  of  an  empty 
treasury  and  making  an  assessment  at  the  end  of  the  year. 

The  Commissioner:  There  is  not  much  difficulty  to  be  apprehended  on  that 
score  I  think  if  you  start  with  a  reasonable  estimate  of  what  the  current  cost  plus 
the  surcharge  would  be.  It  would  be  very  easy  to  adjust  it  at  the  end  of  the  year. 
Mr.  Dawson  :  That  is  my  judgment.  I  think  it  would  he  easy  to  make  out  a 
schedule  of  rates  that  would  be  pretty  reliable.  They  might  require  some  read- 
justment at  the  end  of  three  years,  but  I  should  think  they  would  stand  for  that 
time.  It  must  be  taken  into  account  that  that  rate  is  not  meant  as  a  fixed  rate, 
it  is  meant  as  a  rate  of  assessment  by  which  you  distribute  a  loss. 

Mr.  Kingston  :  Then  on  that  question  of  classification.  You  probably  have 
seen  the  Employers'  Liability  Company's  classification.  There  is,  as  you  know,  a 
builders'  schedule,  and  metal  schedule,  and  different  schedules. 

Mr.  Dawson  :  It  is  a  grouped  classification  such  as  Mr.  Wegenast  has  spoken 
of. 

Mr.  Kingston  :  Under  the  builders'  schedule  there  would  be  probably  a  dozen 
classifications,  and  so  on.  I  suppose  under  the  ordinary  liability  company's  rate 
book  there  would  be  a  thousand  different  classifications  and  sub-classifications.  Do 
you  see  any  difficulty  in  practically  adopting  these  well  worked  out  classifications 
in  a  system  such  as  has  been  suggested? 


436  MINUTES  OF  EVIDENCE:  Xo.  65* 

Me.  Dawson  :  With  a  reasonable  amount  of  study  and  some  simplification  I 
think  it  would  answer.  I  think  it  would  scarcely  do  to  adopt  it  outright,  but  with 
some  reasonable  study  and  investigation  as  to  whether  the  new  system  might  need 
serious  changes  in  its  relation  to  one  another  I  think  it  would  answer. 

The  Commissioner:  Perhaps  it  would  be  better  to  go  on  with  the  other 
branch,  and  ask  Mr.    Dawson  to  supplement  it  by  a  memorandum. 

Mr.  Wegenast  :  There  was  a  question  raised  with  Mr.  Boyd  by  either  your 
Lordship  or  myself.  Would  you  put  the  schedule  of  rates  in  the  act  itself,  or 
leave  that  to  the  Board,  if  a  Board  were  appointed. 

Mr.  Dawson:  I  should  be  disposed  to  leave  it  to  the  Board.  In  saying  that 
I  wish  to  qualify  it  in  this  way :  If  there  are  no  reasons  of  public  policy  or  of 
custom  that  would  cause  a  contrary  conclusion  I  do  not  see  any  serious  objection 
to  putting  it  into  the  Bill. 

The  Commissioner:  I  think  under  our  system  any  readjustment  in  the  class- 
ification would  have  to  be  subject  to  the  approval  of  the  Lieutenant-Governor  in 
Council,  because  the  Government  is  responsible  for  the  system  if  the  plan  is 
adopted. 

Mr.  Dawson:  That  is  not  uncommon.  There  are  other  countries  where  it  is- 
first  formulated  by  the  Board,  and  worked  out,  and  the  approval  is  more  or  less 
perfunctory  unless  there  is  a  serious  objection  from  some  quarter.  I  should  say 
that  system  would  be  admirable  and  would  work  well. 

The  Commissioner:  You  could  have  it  so  that  it  has  to  be  laid  before  the 
Governor,  and  if  he  does  not  dissent  it  will  go  into  force. 

Mr.  Wegenast:  That  leads  to  another  matter  that  is  of  very  great  import- 
ance, but  which  I  hesitate  to  mention  for  reasons  that  will  be  at  once  apparent. 

The  Commissioner:  After  you  mention  them. 

Mr.  Wegenast:  Yes.    I  am  trying  to  account  for  my  hesitation.     We  recom- 
mend in  the  brief  which  I  have  filed  the  organization   of  an  independent  State 
non-political  Board.     As  I  put  it  here,  we  recommend  the   creation   of  a   State,, 
non-political  insurance  department. 

The  Commissioner  :  You  will  have  to  find  some  uninhabited  country  to  find 
that. 

Mr.  Wegenast:  I  think  my  idea  will  at  once  be  apparent  when  I  refer  to  the 
Dominion  Bailway  Board  and  the  Ontario  Railway  Board,  and  the  other  com- 
missioned Boards  which  we  have  in  this  country  which  may  be  described  as  non- 
political,  and  are  generally  considered  as  outside  the  immediate  scope  of  the 
system  of  responsible  Government  which  we  have  here. 

The  Commissioner:  You  would  exclude  all  manufacturers  if  you  did  that? 
They  are  generally  in  evidence,  they  say,  some  way  or  other. 

Mr.  Wegenast:  I  am  not  suggesting  that  the  body  should  be  composed  of 
them. 

The  Commissioner  :  You  must  have  somebody  with  ideas.  I  quite  agree  that 
it  should  be  non-partisan. 

Mr.  Wegenast:  That  is  the  idea.  In  short,  the  Board  should  not  be  subject 
to  what  we  call  the  spoils  system,  and  I  am  speaking  of  that  not  only  in  the  sense 
that  the  appointees  should  understand  Hint  their  term  of  office  continues  notwith- 
standing a  change  of  political  complexion  in  a  Government,  bul  in  the  other  senses 
that  go  along  with  it.  It  is  pretty  difficult  to  describe  just  what  one  means,  but 
the  general  reference  to  the  Railway  Board  of  Canada  I  think  indicates  the  scope 
of  niv  surest  'on. 


1912  WORKMEN'S  COMPENSATION   commission.  437 

The  Commissioner:  You  have  forgotten  with  the  Railway  Board,  in  some 
cases,  at  all  events,  there  is  an  appeal  to  the  Privy  Council  of  the  Government. 

Mi;.  Wegenast:  Yes,  quite  so. 

The  Commissioner:  So  the  State  controls  the  Board  in  a  sense. 

Mi;.  Wegenast:  I  was  not  referring  to  that.  T  would  not  like  to  sec,  and  I 
am  saying  this  advisedly  as  an  officer  of  the  Manufacturers'  Association,  the  matter 
put  in  the  hands  of  a  Government  Department  under  a  Cabinet  Minister.  That 
is  another  way  of  expressing  my  idea. 

The  Commissioner:  You  have  not  discussed  yet  this  question  of  how  the 
fund  is  to  be  created,  although  it  has  been  incidentally  referred  to. 

Mr.  Wegenast  :  I  am  not  disposed  to  give  any  very  serious  attention  to  that. 
Mr.  Dawson's  views,  I  think,  are  known,  and  I  have  proposed  to  leave  that  over 
in  the  meantime  for  what  1  considered  something  a  little  more  important. 

The  Commissioner  :  I  would  like  to  have  got  not  only  his  views,  but  the 
reasons  for  the  faith  that  is  in  him. 

Mr.  Wegenast:  Is  it  your  Lordship's  wish  that  I  should  go  into  that  now? 

The  Commissioner  :  We  know  what  his  views  are,  and  I  would  like  to  know 
what  the  basis  of  them  is. 

Mr.  Dawson  :  What  you  understand  my  view  to  be  I  hope  is  that  I  do  not 
know  of  any  reason  based  upon  experience  or  knowledge  of  the  working  plans  in 
other  countries  why  workmen  should  be  required  to  contribute  to  the  payment 
of  the  occupation  accident  cost.  1  do  know  very  good  reasons  why  you  should 
get  rid  of  these  border  line  questions  and  also  make  a  system  of  this  sort  as 
highly  beneficial  as  possible  to  the  working  men  and  their  families,  and  thereby  to 
the  entire  community.  By  having  the  insurance  cover  at  least  non-occupational 
accidents  as  well  as  occupational,  thereby  avoiding  all  disputes  on  that  question, 
and  if  popular  sentiment  is  suffiiently  developed,  also  cover  sickness,  and  when 
it  does  I  am  perfectly  clear  that  the  workmen  should  contribute  and  should 
contrihute  liberally  to  the  fund.  I  am  also  equally  clear  that  from  my  know- 
ledge of  how  it  has  worked  in  other  countries  that  they  will  contribute  willingly, 
and  in  my  judgment,  in  the  United  States  at  least,  Avould  to-day  do  so  very 
gladly.  That  opinion  is  based  upon  personal  experience  such  as  in  this  associa- 
tion I  spoke  of  where  I  found  they  contributed  amounts  as  high  as  one  per 
•cent,  or  one  and  a  half  per  cent,  or  even  two  per  cent,  of  their  wages.  That 
is  a  pretty  large  contribution.  When  the  benefits  are  such  as  to  warrant  it, 
and  are  such  as  in  the  opinion  of  not  only  workmen  but  practically  the  whole 
civilized  world  now  ought  to  be  borne  by  the  industry,  but  are  things  which  should 
be  borne  by  them  individually  en  masse,  they  quite  see  it  and  are  ready  to  make 
contributions.  If  you  should  find  it  possible  to  work  out  a  first-aid  plan  to  take 
care  of  the  earlier  weeks,  of  some  such  nature  as  I  am  suggesting,  I  think  that  a 
contribution  would  be  welcomed  by  the  working  men  here,  as  I  am  sure  it  is  every- 
where else.  That  is,  if  contribution  could  be  made  so  that  just  the  moment  an  acci- 
dent happened,  whether  it  was  one  that  came  within  the  scope  of  "arising  out  of  and 
during  the  course  of  employment "  or  not,  assistance  would  be  rendered  and  bene- 
fits would  be  paid,  and,  better  still,  if  in  the  event  of  disabling  sickness  the  same 
were  done,  I  am  entirely  confident  that  a  liberal  contribution  from  the  working 
men  of  Canada  would  not  be  resisted,  but  would  be  welcomed. 

The  Commissioner:  I  would  like  to  have  you  tell  us  what  your  reason  is 
for  thinking  that  beyond  the   risks  that  are   neither   the   fault  of  the   employer 


438  MINUTES  OF  EVIDENCE:  No.  65 

or  the  employee,  the  risks  that  are  due  to  the  fault  of  the  employer  and  the  risks 
that  are  due  to  the  not  serious  negligence  of  the  employee,  due  to  modern  con- 
ditions under  which  they  work — a  little  inattention  by  the  man  in  what  he  is 
doing,  that  strictly  might  be  considered  negligence — put  those  on  one  side,  and 
say  the  workman  is  not  to  be  deprived  of  compensation  by  reason  of  that.  What 
is  the  justification  for  saying  when  you  go  beyond  that,  and  when  he  is  protected 
against  his  own  negligence  by  this  insurance  fund,  that  he  should  not  be  asked  to 
contribute  to  the  extent  to  which  he  is  protected? 

Me.  Dawson  :  It  does  not  appeal  to  me.  I  say  that  with  a  good  deal  of  hesi- 
tation, but  it  does  not  appeal  to  me  for  this  reason,  that  in  the  first  place  under 
any  rational  system  of  compensation  the  workmen  make  a  very  large  contribution 
by  accepting  very  materially  less  benefits  than  their  entire  earnings.  That  is 
when  a  man  is  disabled  there  is  a  loss  of  all  his  earnings,  and  something  more, 
namely,  his  care  and  medical  attention,  and  yet  it  is  not  proposed  anywhere  in 
this  country  or  in  the  United  States  to  give  him  over  60  per  cent.  So  that  he  has 
made  one  very  large  contribution  at  the  outset. 

The  Commissioned  :  That  is  a  contribution  he  makes  to  those  things  for 
which  he  is  the  most  responsible. 

Mi?.  Dawson:  Yes,  and  I  think  that  will  fully  cover  the  cases  that  would  be 
charged  up  to  the  responsibility  of  the  workmen,  the  large  contribution.  The  other 
objection  I  have  to  it  is  this:  that  if  we  have  abandoned  the  theory  that  it  should 
not  rest  on  fault  at  all,  why  do  we  return  to  it  for  any  purpose?  In  other  words, 
if  our  impression  is  it  is  really  after  all  a  matter  between  the  community  in  one 
sense  and  the  whole  community  virtually  in  another  sense,  and  we  are  only  using 
this  means  of  taking  care  of  it  as  the  rational  one,  then  we  have  no  reason  to  re- 
open the  ground  in  order  to  discuss  a  merely  cognate  question.  But  my  strongest 
objection  is  it  has  been  tried  and  it  has  not  worked  well.  In  other  words,  again,  "I 
am  from  Missouri."  I  have  a  theory  like  this  as  to  my  own  country,  and  I  have 
sufficient  knowledge  of  Canada,  and  sufficient  admiration  of  it,  so  that  I  will  in- 
clude Canada  in  the  statements  I  made  about  my  own  country — I  believe  we  have 
as  good  people  and  as  good  institutions  as  can  be  found  anywhere,  and  therefore  I 
believe  if  I  find  anything  which  has  been  done  well  anywhere  else  we  can  do  it 
as  well;  but  if  I  find  it  has  been  tried  repeatedly  elsewhere  and  it  has  not  done 
well,  and  no  good  purpose  has  been  served  by  it,  then  I  am  very  slow  to  believe 
that  if  we  tried  it  we  would  have  good  success  with  it.  I  quite  appreciate  if  we 
have  as  good  people  and  as  good  institutions  as  anywhere  else  we  might  succeed  where 
they  have  failed,  but  I  never  feel  sure"  of  it.  Now,  they  have  required  the  employees 
to  contribute  to  accident  funds  in  Austria  for  very  nearly  a  quarter  of  a  century. 
I  think  it  was  commenced  in  1887.  The  contribution  to  begin  with  was  whittled 
down  to  ten  per  cent.,  altogether  too  small  to  really  have  any  influence  upon  the 
workmen  towards  prevention.  A  very  large  proportion  of  the  employers  do  not 
collect  it.  Those  who  did  collect  it,  in  any  event,  received  the  ill-will  of  their 
employees.  It  does  not  amount  to  enough  to  be  really  worth  while,  and  it  is  pretty 
generally  the  opinion  there  that  it  has  not  been  a  good  feature.  It  has  adhered  to 
it,  however.  The  Austrian  Government  is  very  much  disposed  to  do  what  it 
pleases  and  it  has  been  adhering  to  it,  but  it  is  not  regarded  anywhere  as  having 
done  well. 

The  Commissioner:  The  principal  reason  in  which  it  would  be  justifiable,  if 
at  all,  would  be  as  the  price  which  the  workman  pays  for  his  insurance  against  his 
own  carelessness. 


1912  WORKMKX'S  COMPENSATION"  COMMISSION.  439 

Mr.  Dawson:  Yes,  but  even  on  that  theory,  as  I  pointed  out,  he  pays  a  big 
price  already. 

The  Commissioner:  That  is  the  strongest  argument  I  have  heard  yet.  The 
mass  of  them  pay  that. 

Me.  Dawson:  That  is  true. 

Me.  Wegenast:  What  objection  would  there  be  to  this,  Mr.  Dawson,  as  I 
have  suggested,  a  clause  making  it  optional  with  the  employer  on  due  notice,  and 
perhaps  with  the  consent  of  the  Board,  permitting  the  employer  to  deduct  a  cer- 
tain percentage  of  the  insurance  premium? 

The  Commissionee:  No  matter  what  the  opinions  were,  I  would  not  recom- 
mend anything  like  that. 

Me.  Dawson  :  It  seems  to  me,  too,  your  Lordship,  that  it  is  objectionable  on 
this  ground :  that  it  puts  a  very  big  discriminating  power  in  the  hands  of  that 
Board,  which  I  should  think  would  draw  it  into  politics.  I  mean  there  would  be 
tremendous  influences  brought  to  bear. 

The  Commissionee  :  Then  you  would  always  have  the  employer  making  regu- 
lations and  forcing  the  men  to  agree  to  them. 

Me.  Wegenast  :  If  a  clause  like  that  were  contained  in  the  act  the  employers 
in  this  Province,  no  more  than  the  employers  in  Austria,  would  be  disposed  to  en- 
force that  unless  occasion  arose.  It  would  be  in  every  case  a  term  in  the  contract 
of  employment  whether  the  deduction  was  to  be  made  or  not.  It  would  be  under- 
stood between  the  men  and  the  employer  when  they  entered  the  employment 
whether  that  was  lo  be  deducted  or  not.  Otherwise,  my  proposition  is  that  there 
would  have  to  be  a  notice,  a  month  or  whatever  you  want  to  make  the  length  of 
time,  before  the  rule  cuild  be  enforced.  Now,  suppose  the  employer  found  that 
the  employees  were  careless  in  removing  safety  appliances,  or  whatever  other  form 
the  carelessness  might  take,  he  could  post  up  a  notice  in  his  shop,  or  the  foreman 
could,  warning  the  men  that  this  contribution  would  be  enforced  unless  the  rules 
were  observed.  Do  you  see  any  objection  to  a  power  of  that  kind  in  the  act  under 
those  circumstances?  I  can  see  myself  there  might  be  some  objection,  and  it  is 
only  because  I  want  to  leave  it  open  and  be  as  reasonable  as  I  possibly  can  that 
I  suggest  the  consent  of  the  Board.    I  would  rather  not  have  it,  of  course. 

Mr.  Dawson  :  I  do  see  objections,  and  yet  there  is  some  force  in  the  propo- 
sition, that  it  might  have  a  deterring  effect  at  times.  Let  us  consider  it  first  from 
the  standpoint  of  no  consent  of  the  Board  being  required.  The  thing  I  fear  about 
it  is  that  it  would  be  something  which  would  be  done,  not  by  the  wisest  employers, 
but  by  the  meanest.  If  the  consent  of  the  Board  was  required  I  would  expect  they 
would  be  bombarded  with  applications  for  consent,  and  having  once  consented  for 
a  few  employers  they  could  scarcely  refuse  it  to  others  without  being  charged  with 
discriminating.  Then,  again,  their  lives  would  be  made  miserable  without  any 
good  result. 

The  Commissionee  :  Surely  when  once  you  have  settled  upon  the  principle 
you  want  it  plain  and  simple,  with  practically  no  exceptions. 

Me.  Dawson  :  I  quite  concur  in  that,  your  Lordship.  It  seems  to  me  so.  I 
do  not,  of  course,  pass  upon  the  applicability  of  the  thing  to  this  country,  but  in 
general  I  would  not  like  it. 

The  Commissionee:  It  would  be  at  once  said,  from  what  we  have  seen  here, 
that  the  men  had  been,  perhaps  not  directly,  but  indirectly  forced  to  agree  to  this. 
The  veo-y  thing  you  want  to  bring  about,  a  better  state  of  feeling  between  em- 
ployers and  workmen,  would  be  imperilled  by  such  a  thing  as  that. 


440  MINUTES  OF  EVIDENCE:  Xo.  65 

Mr.  Miller  :  It  would  cause  friction  and  irritability  between  the  parties. 

Mr.  Gibbons:  Didn't  Mr.  Wegenast  make  the  statement  the  other  night  that 
laws  were  not  made  for  honest  men? 

The  Commissioner  :  Laws  are  made  for  everybody  to  obey. 

Mr.  Gibbons  :  That  was  his  statement,  that  it  would  be  only  necessary  to  make 
a  law  to  check  those  who  would  be  dishonest,  or  something  to  that  effect. 

The  Commissioner:  1  think  it  would  be  very  well,  Mr.  Wegenast,  to  make 
a  provision  that  where  a  particular  manufacturer  made  a  better  provision  than 
the  act  makes  for  his  workmen  he  should  be  outside  the  act. 

Mr.  Dawson:  If  you  put  in  an  insurance  system  such  as  we  have  been  dis- 
cussing I  do  not  think  any  employer  would  want  to  be  outside  of  the  act.  The 
■only  cases  in  Germany  where  they  found  there  was  such  a  thing  were  cases  like 
the  great  Krupp  works  where  they  already  1  id  started  systems  which  really  were 
more  liberal  than  the  German  laws,  and  Krupp  kept  it  up,  and  so  have  his  suc- 
cessors. They  were  taken  out  of  the  act  so  long  as  they  maintained  that.  But  I 
very  much  doubt  if  any  employer  in  Ontario  would  wish  to  be  ouside  it. 

The  Commissioner:  I  think  you  told  us  your  information  was  that  the  cor- 
responding provision  in  the  British  Act  is  a  dead  letter. 

Mr.  Dawson:  It  is,  and  the  proposed  provision  in  the  Federal  Act  which  I 
have  been  asked  to  draft  is  certainly  a  dead  letter  if  it  is  drawn  in  a  form  like 
that  of  the  British  Act. 

Mr.  Wegenast  :  Just  in  order  to  preserve  my  submission,  which  of  course  I 
want  to  stand,  1  put  it  in  this  way  to  Mr.  Dawson:   Do  you  consider  that  the 
highest  degree  of  preventive  care  can  be  attained  without  contribution,  or  with- 
out having  the  pecuniary  interest  of  the  employee  enlisted  as  directly  as  possible 
on  the  side  of  prevention? 

Mr.  Dawson  :  I  am  inclined  to  believe  if  you  could  devise  a  plan  under  which 
during  the  first  week  the  benefits  were  taken  care  of  as  in  Germany  from  a  fund 
to  which  both  parties  contributed,  provided  that  contributions  also  covered  benefits 
fully  equal  to  the  employees'  contributions  other  than  occupational  accidents, 
1  do  believe  it  would  have  the  very  effect  it  has  in  Germany,  namely,  of  strongly 
enlisting  the  employees  to  prevent  accidents  and  prevent  sickness,  and  generally 
to  improve  their  conditions  in  those  regards,  and  it  would  be  a  very  good  thing. 

Mr.  Wegenast:  You  have  observed  the  provision  in  the  draft  Washington 
Act,  which  was  left  out  for  reasons  we  need  not  discuss.  You  have  observed  the 
provision  for  a  first-aid  fund? 

aIr.  Dawson:  I  have  an  indistinct  recollection  of  it,  but  in  general  I  think 
ii  was  this:  That  there  was  to  be  a  contribution  towards  that  fund,  and  it  was  to 
cover  something  beyond  occupational  accidents.  Am  I  right  as  to  the  second 
point  ? 

Mi;.  Wegenast:  Xo,  I  don't  think  so  as  to  the  second  point. 
Mi;.  Dawson:  Then  I  should  not  approve  of  it  personally. 

Mr.  Wegenast:  The  provision  is  this,  that  a  fund  is  created  in  the  State 
treasury  to  be  known  as  the  First-Aid  Fund,  into  which  shall  be  paid  by  each 
employer  on  or  before  the  15th  day  of  November,  1911,  and  each  month  there- 
after, the  sum  of  four  cents  for  each  day's  work  or  fraction  thereof  done  by  each 
workman  for  him  during  the  preceding  calendar  month  or  part  thereof,  and  the 
sum  of  such  four  cents  shall  be  deducted  by  the  employer  from  the  pay  of  the 
workman.     Mr.  Preston  tells  me  that  his  intention  was  to  have  an  equal  contri- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  -Ill 

bution  from  employers  and  employees.  It  might  be  well  to  explain  tbe  reason 
Mr.  Preston  gave  me  for  culling  that  out.  lie  said  tbe  time  was  exceedingly  sbort 
for  the  adjournment  of  the  legislature,  and  a  good  deal  of  objection  was  raised 
because  tbe  contribution  of  two  cents  a  week  was  as  large  in  such  industries,  for 
instance,  of  mattress  makers  as  it  was  in  iron  working  industries.  Now,  for  tbe 
sake  of  making  tbe  contribution  definite  Mr.  Preston  bad  put  in  tbe  sum  of  four 
cents,  two  cents  to  be  deducted  from  tbe  wages  paid.  His  idea  was  that  they 
should  contribute  in  equal  proportion,  but  there  was  not  sufficient  time  to  re- 
draft tbe  section  as  it  was  going  through  the  legislature.  It  had  to  be  abandoned 
in  order  to  get  the  act  through. 

The  Commissioner:  That  was  limited  to  accidents? 

Mr.  Wegenast:     It  was  a  first-aid  fund  to  take  care  of  the  employees  in  case 
of  accident. 

The  Commissioner:  Only? 

Mr.  Wegenast:     I  think  so.     The  draft  act  gives  the  scope  of  the  fund. 

Mr.  Bancroft:  Would  you  mind  explaining?  Does  this  mean  occupational 
or  non-occupational  accidents? 

Mr.  Wegenast:  I  am  looking  for  that.  "Upon  the  occurrence  of  any  injury 
to  a  workman  he  shall  receive  from  the  First-Aid  Fund  proper  medical,  surgical 
and  hospital  service,  and  compensation  for  the  period  of  temporary  or  other  dis- 
ability in  the  sum  of  $5  per  week,  but  not  to  exceed  three  weeks,  payable  at  the 
end  of  each  week.  It  shall  be  the  duty  of  the  employer  to  see  to  it  that  the 
immediate  medical  and  surgical  services  are  rendered,  and  transportation  to  the 
hospital  provided,  and  all  charges  therefore  shall  be  paid  out  of  the  First-Aid 
Fund."  There  is  something  further  there  than  simply  the  money  compensation 
of  $5  per  week,  which  is  on  the  same  basis  as  the  $20  per  month.  There  is  the 
surgical  attendance  and  transportation  and  hospital  expenses  in  addition  to  that, 
but  there  is  nothing  of  course  about  occupational  diseases. 

What  would  you  say,  Mr.  Dawson,  to  a  proposition  which  I  am  making  in 
my  brief  as  an  alternative  to  a  money  contribution  by  way  of  a  deduction  from  the 
wages  ?  I  may  say  that  I  have  stated  in  my  brief  that  contribution  from  the  work- 
men may  take  three  forms. 

The  Commissioner:  Perhaps  you  had  better  not  go  into  your  brief,  as  our 
time  is  short. 

Mr.  Wegenast:  I  would  like  to  put  the  three  alternative  forms  before  Mr. 
Dawson.  The  first  was  a  money  contribution,  the  second  a  contribution  by  way 
of  a  waiting  period,  of  say  four  weeks,  which  I  proposed  to  suggest,  during  which 
the  injuries  would  be  taken  care  of  by  a  first-aid  fund  along  the  lines  suggested 
by  Mr.  Preston's  draft  act. 

Mr.  Dawson  :  I  should  very  greatly  favour  it  if  it  was  extended  to  take  care 
of  all  accidents,  whether  occupational  or  not,  and  still  more  if  it  would  take  care 
of  sickness.  I  have  this  impression  that  a  great  many  employers,  if  they  would 
sit  down  and  consider  the  matter,  are  out  of  money  a  good  deal  on  account  of 
sickness  and  non-occupational  accidents,  through  voluntary  assistance,  and  through 
loss  of  time  in  the  factory  or  shop  which  could  have  been  avoided  if  it  had  been 
given  attention,  and  so  on,  and  they  could  very  well  afford  to  thus  extend  it.  I 
very  much  doubt  its  wisdom  otherwise.  Experience  in  other  countries  has  been 
this :  For  -instance,  in  Norway  they  left  thirteen  weeks  off  just  like  they  did  in 
Germany  in  the  hopes  that  there  would  be  voluntary  forms  of  sickness  insurance,. 


442  MIXUTES  OF  EVIDENCE:  Xo.  65 

but  after  waiting  some  sixteen  or  seventeen  years  for  those  voluntary  societies  which 
should  have  been  formed  they  had  to  pass  a  Sickness  Insurance  Act  and  provide 
for  compulsory  contribution  from  both  employers  and  employees  to  fill  that  gap. 
I  think  that  something  like  that  would  he  extremely  desirable.  I  would  very 
much  rather  see  it,  for  instance,  than  to  begin  at  the  first  day  or  the  end  of  the 
first  week,  or  even  the  second. 

Mr.  Wegenast:  You  would  rather  have  the  period  extended  a  little  and  start 
that  fund  ? 

Mr.  Dawson:  That  is  it. 

The  Commissioner  :  The  experience  of  Xorway  does  not  give  much  hope  of 
it  being  vountarily  undertaken? 

Mr.  Dawson  :  I  quite  concur,  and  that  exjDerience  has  been  the  same  in  other 
countries  too. 

Mr.  Wegenast  :  Would  it  be  possible  to  frame  the  act  in  such  a  way  that 
there  would  be  a  stronger  inducement  for  the  formation  of  these  funds? 

Mr.  Dawson  :  Well,  the  inducement  was  made  pretty  strong.  Every  en- 
couragement they  could  give  was  given  in  Xorway.  I  really  cannot  think  of  any- 
thing that  could  be  put  into  the  act  itself. 

Mr.  Wegenast  :  One  thing  I  am  thinking  seriously  about,  your  Lordship,  is 
the  question  of  preserving  the  first-aid  and  sickness  schemes  already  in  existence. 
One  very  good  example  of  those  schemes  is  that  operated  by  the  McClary  Com- 
pany of  London,  which  I  think  you  were  told  about  by  Mr.  Gartshore.       That 
scheme   carries   not   only   accidents   but   also   sickness,   and   includes   the   services 
of  a  nurse,  who  is  sent  out  in  case   a  man   does  not  turn  up   in  the   morning 
for  work.     He   says,   by  the  way,  that   this  man   often  reports  reasons   for  the 
absence  of  the  workman  which  leads  to  the  discharge  of  the  workman. 
Mr.  Dawson  :  That  will  sometimes  happen. 

Mr.  Wtegenast  :  But  in  other  cases  it  is  found  the  workman  is  absenting  him- 
self because  of  illness  in  the  family,  and  the  nurse  very  often  takes  charge  in  a 
case  of  illness  of  the  wife  or  children  and  lets  the  man  go  to  his  work.  That  will 
indicate  something  of  the  scope  of  the  work  of  these  institutions,,  and  I  am  ex- 
ceedingly anxious  personally,  and  I  think  I  am  representing  my  colleagues,  when 
I  advocate  something  that  will  preserve  some  scope  for  those  institutions  and  there 
are  a  great  number  of  them.  There  are  far  more  than  I  realized  when  this  in- 
vestigation began. 

The  Commissioner:  Would  the  practical  way  of  meeting  that  not  be  to  as- 
certain whether  the  large  body  you  represent  would  be  willing  to  make  it  part  of 
the  Act  that  there  should  be  a  first-aid  scheme  such  as  Mr.  Dawson  suggests,  the 
employer  contributing  half  and  the  employee  the  other  half.  That  would  be  a 
pratical  way  of  geting  at  it. 

Mr.  Dawson:  You  would  be  far  in  advance  of  anything  that  has  been  done 
in  this  continent  if  you  did  it,  and  I  am  certain  it  would  work  well.  I  have  had 
a  number  of  years  personal  experience  of  those  things,  and  I  know  it  would  work 
well. 

The  Commissioner  :  That  would  help  to  relieve  the  unions  of  some  of  the 
burdens  they  now  bear. 

Mr.  Dawson:  Yes,  and  if  it  were  done  under  the  compulsion  of  the  law  there 
would  not  be  the  objection  1"  the  voluntary  schemes  that  you  have,  that  they  are 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  1  i:; 

used   to   break   up   the   union,   which   objection   is   nol    entirely    visionary   by   any 
means. 

Mr.  Wegenast:  I  cannot  off-hand  commit  mv  colleagues. 

The  Commissioner:  Mr.  Dawson  has  thrown  it  out,  and  I  am  suggesting 
that  for  your  consideration. 

Mi;.  Wegenast:  I  simply  said  that  to  qualify  what  I  intended  to  say,  that 
I  would  think  that  such  a  proposition  would  be  supported  by  the  Manufacturers' 
Association. 

Mr.  Dawson  :  I  certainly  would  take  great  pride  in  its  being  done,  and  re- 
gard it  as  highly  creditable  to  your  Association  and  to  your  Province. 

Mr.  Wegenast:  You  would  not  carry  your  objection  to  the  workmen's  con- 
tributions so  far  as  to  condemn  a  scheme  of  that  kind,  if  we  put  that  scheme  in 
operation? 

Mr.  Dawson:     I  should  heartily  favour  it. 

Mr.  Bancroft:  To  get  that  matter  clear  as  far  as  compensation  for  acci- 
dents is  concerned  "  arising  out  of  and  in  the  course  of  employment,"  it  is  not 
based  on  experience  to  say  that  workmen  should  be  required  to  contribute? 

Mr.  Dawson:  The  contribution  of  the  employer  and  the  employee  in  a  plan 
which  covers  sickness  and  non-occupational  accidents,  as  well  as  occupational 
accidents,  would  be  nearer  fair  to  the  employer  if  it  was  two-thirds  from  the  em- 
ployee and  one-third  from  the  employer. 

Mr.  Bancroft  :  If  it  covered  them  all  ? 

Mr.  Dawson  :  Yes,  because  sickness  is  more  numerous. 

Mr.  Bancroft  :  Supposing  in  the  Province  of  Ontario  we  should  have  a  Com- 
pensation Act  which  just  covered  injuries  and  accidents  arising  out  of  and  in  the 
course  of  employment,  it  would  not  be  justice  according  to  the  experience  of  other 
countries  to  ask  the  workmen  to  contribute? 

Mr.  Dawson:  I  have  already  stated  that. 

Mr.  Bancroft:  If  it  was  extended  in  its  scope?  , 

Mr.  Dawson  :  So  as  to  cover  during  the  earlier  weeks  sickness  of  all  kinds 
and  accidents  of  all  kinds,  then  I  think  it  would  be  fair  and  just. 

The  Commissioner  :  Would  it  not  be  pretty  difficult  to  get  at  a  financial  basis 
in  that? 

Mr.  Dawsox  :  That  is  easier  than  the  accident. 

Mr.  Bancroft:  We  would  really  be  going  further  than  they  have  gone  any- 
where else.  According  to  the  terms  that  are  used  all  over  the  world  in  those 
matters,  in  that  case  we  would  really  be  going  further  than  Workmen's  Compen- 
sation; we  would  be  taking  on  social  insurance. 

Mr.  Dawson  :  You  would  be  taking  on  sickness  insurance  for  the  early  weeks. 

The  Commissioner:  Supposing  that  was  not  adopted  and  it  was  simply  a 
scheme  on  your  lines  with  disability  lasting  only  a  week  or  two  weeks,  should  there 
be  any  compensation  for  that  period? 

Mr.  Dawson:  I  should  say  not  certainly  for  the  first  week,  but  in  that  case 
undoubtedly  the  idea  that  is  being  accepted  over  in  the  States,  where  they  wish  to 
give  waiting  periods  of  two  weeks  or  longer,  I  think  ought  to  be  adopted.  That 
is,  that  the  actual  necessary  hospital  or  physician's  expenses  should  be  assumed. 

The  Commissioner  :  I  suppose  the  main  object  of  that  is  to  avoid  having  to 
pay  for  trivial  things  that  really  need  not  interfere  with  the  man  going  on  with  his 
work,  and  to  guard  against  malingering. 


444  MINUTES  OF  EVIDENCE:  No.  65 

Me.  Dawson  :  And  also  to  guard  against  a  man  going  on  working  that  is  not 
able-  to  work. 

The  Commissioner  :  If  you  limit  it  to  paying  for  the  actual  hospital  and 
medical  expenses  there  would  not  be  any  temptation  to  incur  those  expenses. 

Mr.  Dawson  :  Undoubtedly  that  is  true. 

Mr.  Bancroft:  Would  I  be  right  in  saying,  Mr.  Dawson,  that  your  views  are 
in  the  case  of  a  Compensation  Act,  where  there  was  a  waiting  period  of  any  kind 
whatever  which  Avas  covered  by  a  sickness  insurance,  that  the  burden  of  the  com- 
pensation should  be  borne  by  the  industry,  or  a  tax,  without  contribution  to  the 
workmen,  but  in  case  of  the  other  things  being  covered  through  a  fund  for  sick- 
ness then  the  workmen  should  contribute  to  that,  but  not  to  the  other. 

Mr.  Dawson  :  Let  me  make  it  clear.  I  would  be  utterly  opposed  to  the  work- 
men being  required  to  contribute  to  a  pure  plan  of  workmen's  compensation  for 
industrial  accidents,  absolutely,  but  if  there  was  coupled  with  that  during  the 
early  weeks,  for  instance,  a  protection  against  sickness  and  non-occupational  acci- 
dents out  of  a  fund  contributed  both  by  workmen  and  employers,  so  that  the  results 
of  occupational  accidents,  non-occupational  accidents  and  sickness  would  be  taken 
care  of  during  those  early  weeks,  I  should  then  consider  it  would  be  entirely  proper 
to  ask  the  workmen  to  contribute,  for  the  reason  that  they  would  be  receiving 
benefit  from  that  fund  other  than  the  occupational  accident  benefit. 

Mr.  Bancroft:  In  that  case  it  would  be  like  the  German  system? 

Mr.  Dawson  :  Yes. 

Mr.  Bancroft  :  Then  in  the  administration  of  the  fund  for  sickness  insur- 
ance the  workmen  should  have  representation  according  to  the  percentage  they 
pay? 

Mr.  Dawson  :  Surely,  and  in  fact  every  employer  has  found,  as  I  have  ex- 
plained already,  it  is  wiser  to  have  that  representation. 

Mr.  Kingston:  Has  there  not  been  some  change  made  in  the  German  Beich- 
stag  on  that  question  ? 

Mr.  Dawson  :  Yes,  previously  the  employee  was  required  to  contribute  two- 
thirds  and  the  employer  one-third,  and  the  change  has  been  to  increase  the  em- 
ployers' contribution  to  half  and  also  to  increase  his  representation  to  half. 

The  Commissioner  :  No  question  of  that  kind  would  arise  under  such  a  Board 
as  you  have  suggested? 

Mr.  Dawson:  No,  but  you  would  hardly  take  these  early  weeks  of  the  sick- 
ness, too,  and  charge  the  Board  with  its  entire  management. 

The  Commissioner  :  It  would  have  to  supervise  it,  and  do  it  under  a  sub- 
ordinate body,  I  suppose. 

Mr.  Dawson  :  You  would  set  up  in  each  locality  perhaps  a  little  organization 
of  its  own,  and  the  representatives  would  be  selected  by  the  employers  on  the  one 
side  and  the  employees  on  the  other,  under  the  strict  supervision  of  the  Board. 
Then  it  would  be  democratic  in  its  operation,  and  experience  has  found  that  is 
the  best. 

Mr.  Wegknast:  Your  idea  is  the  body  which  would  govern  this  benefit  fund 
should  be  local  ? 

Mr.  Dawson:  It  certainly  should  be  local.  Whether  there  might  not  also  be 
permitted  bodies  connected  with  large  industries  as  an  entirely  separate  matter 
should  be  left  to  that  Board,  but  in  the  absence  of  membership  in  any  such  body 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  445 

the  man  should  be  considered  a  member  of  the  local  body.     That  is  the  only  way 
you  could  handle  it. 

The  Commissioner:  If  there  was  a  difference  of  opinion  between  the  two  re- 
presentatives, who  would  settle?  What  is  the  German  system  where  there  is  equal 
representation  ? 

Me.  Dawson  :  They  have  not  had  equal  representation  until  now,  but  I  think 
with  equal  representation  there  is  this  provision  put  in,  that  the  Government 
supervising  authorities  appoint  a  referee  who  acts  as  chairman  of  the  Board. 

Mr.  Miller  :  There  would  have  to  be  something  of  that  sort. 

Mr.  Dawson  :  Notwithstanding,  they  have  made  a  good  deal  out  of  getting 
equal  representation,  the  experience  I  know  in  Germany  has  been  generally  that 
the  decisions  of  the  Board  have  been  pretty  nearly  unanimous.  The  exception  is 
rare.  I  think  there  would  not  have  been  a  change  at  all,  your  Lordship,  if  it  had 
not  been  that  the  German  workmen  are  pretty  nearly  to  a  man  Socialists,  and 
the  Socialist  parties  have  been  utilizing  the  two-thirds  control  of  these  insurance 
societies. 

The  Commissioner:  They  would  probably  do  what  the  humane  employer 
does  voluntarily. 

Mr.  Dawson  :  Yes.    That  is,  where  he  is  able  to  do  it. 

Mr.  Miller  :  I  would  like  to  ask  a  question  with  regard  to  the  disturbance 
that  would  be  created  among  the  fraternal  societies  if  this  insurance  was  brought 
in  to  cover  that  waiting  period.  We  have  a  great  many  fraternal  societies  here 
to  which  members  contribute  for  the  sake  of  getting  benefits  in  the  case  of  sick- 
ness. Do  you  know  anything  about  the  disturbance  to  those  societies  on  a  scheme 
of  this  sort  being  inaugurated? 

Mr.  Dawson  :  I  am  very  glad,  indeed,  that  the  question  is  asked,  if  you  have 
a  large  number  of  societies  furnishing  sick  benefits.  In  the  States  our  fraternal 
societies  are  mostly  only  furnishing  death  benefits,  though  there  are  some  of  the 
others.  There  may  be  many  more  here  in  proportion.  The  way  in  which  that  was 
done  in  Germany  was  this.  There  were  already  quite  a  good  many  sickness  in- 
surance societies  of  the  voluntary  type,  and  the  Government  set  up  the  following 
rules  for  its  supervising  department.  First,  there  must  be  a  communal  society. 
That  society  must  admit  everybody  who  is  not  a  member  of  some  other  kind  of 
society,  and  if  any  person  is  found  who  comes  within  these  rules  who  is  not  in- 
sured anywhere  else  he  must  be  recorded  by  the  communal  society.  Second,  there 
may  be  also  societies  connected  with  particular  trades  such  as  a  trades-union 
society.  Third,  there  may  be  also  particular  societies  connected  with  given  in- 
dustries, such  as,  we  will  say.  a  particular  iron  works  or  steel  company,  or  what- 
ever it  may  be.  I  have  omitted  some  minor  classifications.  Last  there  may  be 
voluntary  sickness  insurance  societies.  If  the  employee  is  insured  in  any  one  of 
these,  that  is  sufficient.  The  German  Government  discriminated  against  the 
voluntary  insurance  society  in  one  respect,  however,  that  if  the  employee  presented 
his  card  to  his  employer  and  showed  he  was  insured  there  the  employer  was  not 
required  to  contribute.  If  he  was  insured  in  any  one  of  the  others  the  employer 
had  to  contribute.  Mow,  what  they  have  done  recently  I  don't  know.  I  know 
there  was  talk  in  Germany  of  requiring  the  employer  to  contribute  even  when  the 
insurance  was  in  a  voluntary  society,  as  it  was  felt  that  was  unfair.  The  way  that 
contribution  is  made  under  compulsion  in  Germany  is  interesting,  and  while,  of 
course,  it  is  in  the  book,  it  is  not  so  clear  that  one  usually  understands  it  well. 


446  MINUTES  OF  EVIDENCE:  Xo.  65 


The  employee  never  contributes  anything  except  to  these  voluntary  societies,  and 
there  he  makes  the  payment  himself.  If  he  insures  in  any  one  of  the  others  the 
employer  makes  the  payment.  He  does  not  make  his  own,  but  the  employer  takes 
it  from  the  employee's  wages.  The  result  is  that  all  these  books  of  membership 
are  in  the  employer's  hands  and  it  is  his  duty  to  see  that  the  payments  are  kept 
up,  and  he  makes  the  deduction.  In  case  an  employer  fails  to  make  those  deduc- 
tions or  makes  the  payments  to  the  sickness  insurance  society  and  his  employee 
falls  ill,  it  is  the  duty  of  the  communal  society,  when  informed  by  the  physician 
who  attends  that  man,  to  take  charge  of  the  case  just  as  if  he  had  been  a  regular 
member  in  full  standing  and  dues  all  paid.  Then  they  go  to  the  employer  and 
make  an  investigation  and  require  him  to  pay  all  back  dues  both  of  himself  and 
the  employee  for  which  he  is  liable,  and  they  require  him  to  pay  the  benefits  they 
have  had  to  pay  in  the  case  of  this  particular  man,  and  in  the  event  of  its  being 
a  recalcitrant  case,  not  merely  a  careless  one,  they  make  him  pay  that  in  addition. 

The  Commissioner  :  How  would  they  work  that  out  ?  Supposing  a  man  was 
insured  in  the  Foresters,  or  the  Ancient  Order  of  United  Workmen,  how  would 
that  work  out? 

Mr.  Dawson  :  If  he  is  insured  in  a  private  society  like  that  the  Government 
does  not  interest  itself  in  the  matter,  unless  the  society  fails  to  make  a  payment. 

The  Commissioner:  What  would  they  do  in  a  case  where  there  is  a  contri- 
bution by  the  employer  to  this  sick  fund?  How  would  they  treat  the  case?  Would 
they  pay  any  attention  to  that? 

Mr.  Dawson  :  I  am  afraid  1  do  not  quite  gather  your  meaning. 

The  Commissioner  :  A  man  is  insured  against  sickness  and  he  has  a  sick 
benefit  in  one  of  these  societies.  I  understood  you  to  say  that  where  he  was  in- 
sured in  these  societies  you  mentioned  he  might  pay  the  contribution  into  the  fund 
provided  by  the  act. 

Mr.  Dawson  :  No,  what  I  said  was  that  the  emplo}rer  must  contribute  if  the 
employee  is  insured  in  any  kind  of  society  but  the  private  society. 

The   Commissioner:  What  does  he  contribute? 

Mr.  Dawson  :  Under  the  law  that  is  existing  one-third  of  the  whole  amount. 

The  Commissioner:  Of  what  his  contribution  to  that  society  is? 

Mr.  Dawson  :  Yes,  and  the  employee  two-thirds. 

Mr.  Doggett  :  I  would  like  to  know  under  the  present  German  Act.  take  for 
instance  a  seafaring  man  working  away  from  the  German  Empire  on  a  German 
merchant  ship,  or  a  railroad  man  going  outside  the  German  Empire,  but  he  is 
working  outside  the  German  Empire,  or  a  man  working  for  a  German  building 
contractor  outside  the  German  Empire.  Would  he  come  within  the  German  Act, 
although  working  outside  the  Empire? 

Mi;.  Dawson:  In  answering  your  question,  I  will  only  be  giving  you  an  im- 
pression, because  I  am  not  absolutely  positive  as  to  all  those  three  things.  The 
first  one,  of  a  sailor  or  seaman  working  outside  the  German  Empire,  I  know  abso- 
lutely he  is.  I  think  the  railroad  man  is  covered,  and  I  think  the  contractor  is 
covered.  I  have  a  recollection  of  seeing  both  of  these  things.  The  first  of  them  I 
know  to  be  true. 

Mi;.  MILLER:  These  men  that  Mr.  Doggett  refers  to  are  only  supposed  to  be 
out  of  bhe  German  Empire  temporarily. 

Mi;.   DAWSON:  Yes,   T  BO  understand  it. 

Mi;.  Miller:  They  certainly  should  remain  under  the  provision  of  that  Act, 
on  the  understanding  that  they  arc  only  out   for  a  temporary  time. 


1912  WORKMAN'S  COMPENSATION   COMMISSION.  447 

Me.  Dawson:  Not  only  temporarily,  but  also  in  the  employment  of  a  Gor- 
man employer  whose  headquarters  are  in  Germany,  and  who  has  paid  the  rate. 

The  Commissioner:  Supposing  an  American  contractor  was  to  come  over 
here  and  bring  his  men,  would  he  not  come  under  such  an  act  as  you  suggest 
here  ? 

Me.  Dawson:     lie  would  in  the  absence  of  an  international  treaty. 
The  Commissioner:  Why  should  he  pay  at  both  ends? 
Mb.  Dawson:  He  wouldn't.     I  might  apply  it  in  Europe  where  conditions 
actually  exist,  because  there  are  such  treaties.     There  has  been  a  good  deal  of 
trouble  about  the  matter,  but  I  think  it  is  now  pretty  thoroughly  adjusted. 
The  Commissioner:  He  certainly  should  not  get  double  compensation? 
Mr.  Dawson  :  No. 

Mr.  Bruce:  What  is  the  position  taken  by  Mr.  Dawson  on  the  question  of 
payment  to  dependants  outside  the  Province  or  State  where  the  act  is  in  oper- 
ation ? 

Mr.  Dawson  :  Well,  on  humanitarian  grounds  there  isn't  any  question  that 
the  same  benefits  should  be  paid.  Considering  it  merely  as  a  matter  of  the  com- 
munity dealing  in  one  capacity  with  itself  in  another  capacity  there  does  not 
seem  any  reason  why  it  should  be  paid.  I  should  be  disposed  personally  to  say 
that  the  law  should  take  such  a  form  as  this,  that  where  the  beneficiaries  are 
situated  in  a  nation  giving  similar  rights  substantially  to  people  in  Canada  the 
compensation  should  not  be  withheld. 

The  Commissioner  :     The  favoured  nation  clause. 

Mr.  Dawson  :  Canada  would  be  as  just  to  other  countries  as  they  were  to  her. 
Mr.  Bruce:     Take  the  act  as  at  present  in  operation  in  British  Columbia, 
where  the  miners  who  live  just  inside  the  border  of  Alberta  and  their  dependants 
are  refused  compensation.     Those  are  just  two  States  bordering  on  one  another. 
The  Commissioner:  We  could  not  help  that  in  any  legislation  of  ours. 
Now,  the  scale  of  living  in  these  countries  is  very  much  lower  than  it  is  here, 
and  why  would  it  not  be  reasonable,  where  the  dependants  are  living  in  a  country 
where  $1,000  would  be  as  much  as  $2,000  here,  to  allow  the  Board  to  scale  the 
compensation  down  ? 

Mr.  Dawson  :  I  think  it  would  not  be  unreasonable,  but  the  simple  issue  in 
my  mind  was  whether  we  ought  not  to  get  these  things  in  such  form  that  we  could 
deal  with  them  by  treaty  on  an  equal  basis. 

The  Commissioner  :  We  cannot  enter  into  any  treaty.  This  Province,  and  no 
State  in  the  Union,  could  enter  into  such  a  treaty. 

Mr.  Dawson  :  But  Great  Britain  does  enter  into  treaties  which  would  em- 
brace it.  The  thing  that  occurs  to  me  about  the  matter,  as  your  Lordship  puts  it, 
is  as  follows:  If  a  man  is  working  in  Toronto  and  has  a  wife  and  child  in  Italy 
and  is  contributing  to  their  support,  he  is  contributing  after  all  a  percentage  or 
portion,  and  perhaps  a  proper  portion,  of  his  Canadian  wages.  It  may  be  that 
that  enables  his  family  to  live  much  better  there  than  if  he  remained  there,  but 
that  is  the  measure  of  the  damage  done. 

The  Commissioner:  He  probably  lives  better  himself  also. 
Mr.  Dawson  :  I  think  that  is  so. 

Mr.  Miller:  With  reference  to  the  question  of  compensation  to  dependants 
of  a  man  whose  family  is  living  in  another  country,  his  compensation  is  based  on 
the  wages  that  he  is  earning  here,  and  I  do  not  think  the  compensation  should  be 


448  MINUTES  OF  EVIDENCE:  No.  65 

any  different  because  the  damage  to  the  man  or  his  dependants  is  in  proportion 
to  his  earning  powers  here,  and  not  to  what  their  expenses  are  in  the  other  country. 

Mk.  Dawson  :  In  the  absence  of  some  clear  understanding  with  the  other 
nation  either  by  treaty  or  by  some  trade  agreement  {here  is  one  very  serious 
reason  why  a  difference  should  be  made,  and  that  is  if  you  undertake  to  keep 
track  of  a  Avidow  and  children  off  in  some  distant  country  with  which  there  is 
very  little  communication  and  very  few  means  of  checking  up  matters  you  may 
be  making  a  payment  to  people  who  have  been  dead  for  some  time. 

The  Commissioner:  There  is  another  thing,  too.  There  would  not  be  much 
room  for  reciprocity  with  the  Mongolians  or  Bulgarians  or  Macedonians,  for  there 
isn't  a  Canadian  working  in  any  of  those  countries. 

Mr.  Dawson  :  Of  course  I  hadn't  any  idea  of  putting  it  upon  reciprocity.  In 
case  a  nation  itself  does  not  recognize  these  things  we  should  not  recognize  it  as 
to  it.  It  is  now  pretty  well  covered  by  treaty  in  Europe.  They  had  difficulties 
by  reason  of  the  great  differences  in  the  laws,  but  they  have  it  pretty  well  covered 
now. 

The  Commissioner:  Why  should  that  make  a  difference,  because  a  nation 
is  unfair  enough  not  to  provide  for  its  working  men  ?  Why  should  a  discrimin- 
ation be  made? 

Mr.  Dawson  :  That  was  not  what  I  had  in  mind.  Suppose  the  other  nation 
took  an  exceptional  view  towards  beneficiaries  residing  in  your  country. 

The  Commissioner:  There  would  not  be  one  case  in  ten  thousand  in  the 
nations  I  have  mentioned. 

Mr.  Wegenast  :  Take  between  the  United  States  and  Canada. 

The  Commissioner:  We  have  good  laws  which  prevent  your  people  coming 
over  here  and  good  laws  which  prevent  our  people  going  over  there — either  good 
or  bad  laws. 

Mr.  Doggett:  I  have  just  thought  of  a  case  we  are  now  talking  about.  A 
certain  firm  came  over  here  and  a  man,  a  carpenter,  met  with  an  accident,  and  I 
believe  the  case  has  been  adjourned  from  time  to  time  for  over  twelve  months,  but 
I  understand  from  what  I  read  in  the  papers  the  other  day  that  the  judge  who 
was  sitting  on  the  case  told  the  lawyer  that  he  would  make  him  the  defendant 
if  he  did  not  get  in  touch  with  his  client  soon.  That  was  a  case  similar  to  the 
one  we  are  discussing. 

The  Commissioner  :  No,  that  is  the  other  side.  That  is  the  employer  coming 
here.    You  can't  get  at  him. 

Mr.  Dawson:  Under  the  insurance  plan  you  would  have  got  a  premium  out 
of  him. 

The  Commissioner:  If  you  caught  him  at  the  right  time. 

Mr.  Doggett:  But  the  action  was  taken  before  he  left  Toronto. 

The  Commissioner:  You  cannot  get  blood  out  of  a  turnip.  If  he  is  not 
amenable  to  our  law  we  cannot  get  at  him. 

Mr.  Doggett:  Then  there  are  those  racing  rinks  that  they  built  down  there 
at  the  Exhibition  Grounds. 

The  Commisstonek  :  If  he  has  means  you  can  get  at  it.  We  are  talking  about 
paying  compensation  to  dependants  of  a  man  who  is  living  out  of  the  country. 

Mi;.  Dawson:  What  they  propose  to  do  under  the  Federal  Act  is  in  case  the 
beneficiaries  are  not  resident  in  the  United  States  or  Canada  there  should  be  paid 
to  the  resident  widow,  or  if  no  widow  or  no  resident  child  then  to  any  such  non- 
Ident  child  or  children  a  sum  equal  to  one  year's  wages. 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  449 

Mr.  MacMuechy:  That  is  instead  of  eight  years. 

The  Commissioner:  1  do  not  like  the  look  of  that. 

Mr.  Dawson  :     Personally,  I  do  not  favour  it  myself. 

Mi;.  MacMuechy:   Under  the  ordinary  scale  it  is  eight  years. 

Me.  Dawson:  Yes,  but  it  is  eight  years  at  half  wages,  which  is  equivalent  to 
four. 

Mr.  Wegenast:  I  have  not  asked  Mr.  Dawson  to  come  here  as  my  wit- 
ness, and  I  have  not  treated  him  as  such,  but  I  think  perhaps  it  is  fair  that  I  should 
be  permitted  to  round  him  up  on  some  points. 

The  Commissioner:- He  won't  be  rounded  up. 

Me.  Wegenast:  You  recommend  then,  Mr.  Dawson,  a  State  system  of  in- 
surance ? 

Mr.  Dawson;  I  recommend  a  mutual  insurance  under  State  compulsion. 
Whether  the  control  should  be  in  a  Board  such  as  has  been  proposed,  or  in  mutual 
associations  of  employers  as  in  Germany,  in  my  judgment  is  a  question  to  be 
solved  in  each  individual  instance  according  to  the  requirements.  If  it  covers  all 
Canada  very  likely  I  would  recommend  the  latter.  If  it  covers  only  Ontario, 
unless  you  find  it  would  work  out  well,  your  Lordship,  in  your  judgment,  I  fancy 
the  single  Board  would  be  wiser. 

Mr.  Wegenast  :  At  all  events,  Mr.  Dawson,  and  I  am  putting  these  questions 
in  a  leading  form  because  it  is  quicker,  you  do  not  recommend  an  extension  of 
the  individual  liability  of  the  employer  along  the  lines  of  the  British  Act? 

Mr.  Dawson:  I  do  not. 

Mr.  Wegenast:  Not  even  temporarily? 

Mr.  Dawson:  I  should  regard  it  as  unwise.  I  think,  as  I  stated  last  night, 
the  principles  in  general,  with  some  modifications  that  could  properly  be  made, 
perhaps,  of  employers'  liability  are  right  on  the  proposition  that  it  rests  on.  That 
is  to  say,  if  it  really  was  between  man  and  man  the  principles  as  already  reasoned 
out,  with  some  moderate  modifications,  are  in  my  judgment  correct,  and  we  ought 
not  to  muddle  things  by  changing  that  situation. 

Mr.  Wegenast  :  You  regard  then,  the  obligation  of  the  employer  and  the 
rights  of  the  employee  as  social  in  their  nature  rather  than  individual  as  against  one 
another  ? 

Mr.  Dawson  :  I  think  it  is  a  matter  of  the  community,  and  the  fact  that 
there  is  a  relationship  by  which  that  tax  or  assessment  may  be  levied  is  quite  in- 
cidental. I  would  like  to  say  in  that  connection,  and  perhaps  it  is  very  familiar 
to  your  Lordship,  that  the  original  Bill  brought  by  Mr.  Asquith,  who  is  now  Pre- 
mier, was  to  remove  all  the  defences,  and  that  was  the  thing  that  was  strongly 
supported  in  Great  Britain  at  the  time  that  the  Gladstone  Government  went  down. 
I  presume  your  Lordship  well  recollects  that  the  Asquith  Bill  was  defeated  shortly 
before  the  Home  Rule,  and  instead  of  going  before  the  people  on  that  they  went 
on  the  Home  Pule.  A  compensation  system  was  introduced  by  the  Conservative 
party  there,  and  it  was  strongly  supported  by  Chamberlain,  but  it  was  the  adop- 
tion of  the  Ministry.  Lord  Salisbury's  speeches  on  that  Compensation  Act,  and 
the  principles  on  which  it  was  based,  are  among  the  very  finest  things  I  am 
acquainted  with  on  the  subject. 

Mr.  Wegenast  :  But  Lord  Salisbury's  idea  was  to  work  out  a  system  such  as 
that  of  Germany  by  an  indirect  voluntary  method,  was  it  not? 

Mr.  Dawson  :  It  was  the  idea  so  revealed  in  the  speeches  that  if  thev  imposed 
29  l. 


450  MINUTES  OF  EVIDENCE:  No.  65 


a  direct  liability  upon  the  employer  for  compensation  precisely  the  same  in  nature 
as  in  Germany  was  imposed  through  mutual  insurance,  it  would  result  in  mutual 
insurance  of  two  kinds.  It  was  expected  first  that  these  establishment  funds  or 
mutual  associations  where  the  employer  contributed  part  and  the  employees  part 
would  practically  spread  over  the  country,  and  secondly  that  the  employers  would 
unite  in  mutual  associations  voluntarily  for  the  purpose  of  carrying  the  remainder 
of  that  insurance. 

Mr.  Wegenast:  That  has  not  been  realized? 

Me.  Dawson  :  While  I  understand  the  mutual  societies  have  been  maintained 
there  have  been  very  few  organized. 

Mr.  Wegenast  :  Then  you  have  already  said  that  the  individual  liability  sys- 
tem, as  in  England,  does  not  tend  to  prevent  accidents? 

Mr.  Dawson  :  That  is  the  opinion  of  the  Eoyal  Commission  that  investigated 
in  Great  Britain,  and  the  opinion  of  Englishmen  with  whom  I  have  talked. 

Mr.  Wegenast  :  And  it  is  your  opinion  and  the  opinion  of  the  rest  of  the  ob- 
servers in  the  United  States? 

Mr.  Dawson  :  Yes,  but  that  opinion  is  based  upon  British  information. 

Mr.  Wegenast:  By  the  way,  Mr.  Dawson,  am  I  safe  in  saying,  as  I  propose 
to  say  in  my  brief,  that  there  has  been  during  the  last  year,  or  perhaps  even  the 
last  six  months,  a  unanimity  of  opinion  upon  this  question  amongst  the  leading 
thinkers  in  America  take  yourself,  Mr.  Emery,  Mr.  Preston,  Mr.  Cary  (of  the  New 
York  Central),  Mr.  Hoffman,  and  others  I  might  mention,  am  I  safe  in  saying 
that  there  is  practically  unanimity  amongst  these  men  upon  the  leading  features 
you  have  presented  here? 

Mr.  Dawson:  It  is  undoubtedly  true  that  the  trend  has  been  strongly  in 
that  direction.  Of  course  there  is  nothing  like  unity,  because  there  are  a  great 
many  men  who  still  argue  the  other  way. 

Mr.  Wegenast:  I  am  speaking  of  these  men. 

Mr.  Dawson:  Of  the  men  you  have  mentioned  that  is  undoubtedly  true,  and 
there  are  many  others  besides  them. 

Mr.  Wegenast:  I  am  speaking  of  these  as  outstanding  men  and  writers  on 
the  subject.  The  objections  to  the  State  insurance  idea,  the  collective  insurance 
idea,  comes  largely  from  the  liability  insurance  companies. 

Mr.  Dawson:  There  is  a  great  deal  of  opposition  on  the  part  of  the  liability 
insurance  companies  and  their  agents.  That  opposition  is  open  at  times  and  at 
other  times  it  shows  itself  through  insidious  influences  on  account  of  the  directors 
and  officers  appearing  in  other  capacities  elsewhere,  and  it  is  all  the  more  remark- 
able because  those  companies  have  always  lost  money  in  every  country — there  is 
no  exception  practically  at  the  present  moment — and  they  quite  understand  they 
are  going  to  lose  money  if  they  go  on  with  this.  I  take  it  it  is  mainly  due  to  the 
agency  force  already  engaged  in  employers'  liability  insurance,  and  the  mere  fact 
that  the  organization  itself  is  disposed  to  oppose  it. 

The  Commissioner:  Perhaps  you  could  tack  on  to  this  proposed  bill  some- 
thing to  provide  for  these  unemployed  agents. 

Mr.  Dawson:  My  impression  is  they  would  not  be  unemployed.  The  fact  is 
the  development  of  public  liability  insurance,  as  your  Lordship  is  well  aware  through 
the  trials  that  come  into  court,  that  the  field  is  very  imperfectly  covered  with  in- 
surance, and  while  employers'  liability  is  quite  widely  covered,  it  is  sometimes 
very  unsatisfactorily  covered,  and  it  would  be  a  great  advantage  if  they  would 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  451 


devote  their  attention  largely  to  protecting  the  puhlic  through  public  and  general 
liability,  and  I  really  think  these  agents  would  be  quite  as  well  off  if  this  par- 
ticular field  were  not  open  to  them. 

Mr.  Wegenast:  Then  what  do  you  say  as  to  excepting  the  larger  employers, 
such  as  railways,  from  the  general  scheme? 

.Mi:.  Dawson:  I  should  regard  that  as  unwise.  In  the  first  place  there  is  one 
thing  the  railroad  company  should  think  about.  I  understand  you  mean  making 
them  directly  liable  instead  of  bringing  them  into  the  insurance  scheme? 

Mr.  Wegenast  :  Yes. 

Mr.  Dawson  :  If  the  railroad  company  comes  into  the  insurance  scheme  it 
will  only  have  to  meet  its  assessment  for  the  current  cost  like  anybody  else,  start- 
ing very  low.  In  Germany  it  started  in  at  38  cents  per  $100  of  pay-roll,  if 
I  remember  rightly.  Now,  the  normal  experience  is  about  $1.80  per  $100  of 
pay-roll,  according  to  Germany.  They  are  starting,  therefore,  at  the  easy  end. 
It  was  eleven  years  before  they  reached  $1.80.  It  would  have  gone  very  much 
higher,  because  we  do  not  expect  it  to  reach  its  maximum  short  of  twenty-five 
years,  but  at  the  end  of  twenty-five  years  they  are  running  along  practically  at 
$1.80  still,  showing  they  have  made  very  great  gains  in  prevention.  Had 
they  started  the  other  way,  they  would  have  had  to  set  up  in  their  balance-sheets 
the  present  value  of  all  claims  that  would  be  payable  in  the  future,  all  amounts 
that  would  be  payable  in  the  future  on  account  of  claims  that  arose  that  year, 
and  there  would  be  an  accumulation  of  them  until  they  had  a  reserve  charged 
against  them  of  anywhere  from  five  to  ten  per  cent,  of  a  year's  pay-roll.  Now, 
there  cannot  be  any  advantage  to  a  railroad  in  having  that  situation  to  embarass 
it  right  from  the  start. 

Mr.  Wegenast:  Still,  a  railroad  company  could  notfbe  trusted  to  run  its 
insurance  system  without  putting  up  reserves,  or  without  working  in  the  reserve 
idea  in  their  bookkeeping. 

Mr.  Dawson:  Well,  let  us  see  whether  they  could.  In  the  first  place  they 
would  make  a  dishonest  balance-sheet,  it  would  not  tell  the  truth  about  their  lia- 
bilities. Liabilities  that  are  certainly  payable  in  the  future  are  just  as  much 
liabilities  as  if  they  were  due  to-day,  and  they  must  be  reported  if  they  are  to  tell 
the  truth  in  tne  statement.  In  the  next  place,  there  would  be  still  a  liability  which 
in  all  probability  you  make  a  first  lien  on  their  properties,  because  wherever  an 
individual  liability  is  created  you  well  know  the  payment  of  that  particular  thing 
is  made  a  first  lien  on  the  property.  There  is  another  difficulty.  We  brought 
that  out  before  the  Commission,  and  it  was  an  embarrassment  to  the  proposed 
Bill  at  Washington.  The  railroad  companies  said  if  this  is  to  be  a  first  lien  on 
our  property,  how  can  we  sell  a  locomotive?  Well,  sure  enough,  how  can  you? 
How  could  we  sell  a  branch  line?  Well,  sure  enough,  how  can  you?  Well,  they 
proposed  then  that  it  be  made  a  first  lien  only  in  the  case  of  insolvency,  but  in 
that  case  the  railroad  company  could  sell  all  its  property. 

Mr.  Wegenast:  So  there  is  really  no  way  of  working  the  first  lien  idea? 

Mr.  Dawson:  If  you  don't  leave  it  a  first  lien  you  have  postponed  it  to  all 
the  other  claims,  because  wages  are  first  liens,  and  mortgages  and  bonds,  and  all 
that  sort  of  thing,  and  there  you  are  again. 

Mr.  Wegenast:  I  am  not  representing  the  railroad,  but  it  occurs  to  me,  what 
about  the  argument  in  collecting  all  the  railroads  into  one  system  that  you  penalize 


452  MINUTES  OF  EVIDENCE:  No.  65 

the  better  class  of  railroads  who  have  superior  preventive  devices  and  make  them 
bear  the  burden  of  the  less  progressive  railroads. 

Mk.  Dawson  :  I  have  heard  that  very  argument  was  addressed  privately  to 

Mr.  Brown,  President  of  the  New  York  Central  Railroad,  and  influenced  him . 

Mr.  Wegenast:  Who  is  Mr.  Brown? 

Mr.  Dawson:  He  is  a  member  of  the  Federal  Commission  and  President  of 
the  New  York  Central  Railroad,  and  it  influenced  him  as  a  member  of  the  Com- 
mission and  other  railroad  officers  to  oppose  the  idea  of  insurance,  although  Mr. 
Cary,  the  Chief  Attorney,  had  personally  favoured  it,  and  favoured  it  as  the  only 
'constitutional  method  at  that. 

The  Commissioner:     But  this  Province  has  already  declared  its  policy  in 
"that  respect.     It  has  refused  to  allow  the  railroads  in  regard  to  the  liability  to 
<'inplo3rees  to  stand  on  any  other  footing  than  any  other  employer. 

Mr.  Dawson:  That  is  good.  But  in  this  matter  of  there  being  discrimin- 
ation: As  a  matter  of  fact,  under  any  good  system  I  assume,  your  Lordship, 
you  would  have  power  to  penalize  a  railroad  company  that  did  not  adopt  proper 
devices  for  the  proper  protection  of  its  employees,  and  also  to  give  a  lower  rate  to 
those  which  did  it.  In  other  words,  it  would  not  be  true  that  the  road  that  was  well 
managed  in  this  respect  would  be  paying  more  than  its  fair  share  of  these  claims. 
The  Commissioner  :  It  would  only  differ  in  degree  from  the  case  that  Ave  were 
discussing  before,  of  one  manufacturer  having  a  better  system  than  another. 

Mr.  Dawson  :  The  same  sort  of  thing  precisely,  and  would  be  dealt  with  the 
same  way. 

Mr.  Wegenast:  Will  you  explain  a  little  further,  because  I  have  seen 
your  explanation  in  the  brief  before  the  Federal  Commission,  how  the  current  cost 
plan  of  insurance  tends  to  induce  preventive  care  and  activity  ? 

Mr.  Dawson  :  The  current  cost  plan  starts  out  the  first  year  by  paying  only 

the  money  that  needs  to  be  paid  that  year.    That  is,  for  instance,  for  men  who  had 

been   injured  during  the  year.      You  only  pay   such   weeks'   payments  after  the 

accident  occurs  as  fall  due  during  that  year.    If  all  accidents  were  of  a  permanent 

character   it  would   only  average   six   months,   for   instance.      That   is   the   whole 

period  of  it,  because  all  accidents  on  the  average  would  happen  in  the  middle  of 

the  year,  and  the  whole  duration  would  only  be  six  months.     The  first  payment 

would  be  low  because  it  only  represents  the  accidents  of  one  year,  and  that  portion 

of  it  which  actually  falls  clue  in  that  year.     The  next  year  there  will  fall  upon 

the  fund  payments  because  of  the  accidents  of  the  previous  year  as  well  as  the  year 

you  are  in.     The  next  year  will  be  on  account  of  accidents  of  both  the  previous 

years  as  well  as  the  year  you  are  in,  and  so  on.    Consequently  you  have  naturally 

an  increasing  rate  which  is  estimated  to  increase  pretty  rapidly  for  perhaps  about 

ten  years,  and  then  rather  slowly  and  with  increasing  slowness  for  at  least  fifteen 

years  longer,  and  if  there  is  no  improvement  in  conditions  relating  to  trade  and 

industry  it  will  still  very  slowly  increase  for  twenty-live  years  beyond  that,  because 

.-Mine  of  (he  people  that  were  injured  the  first  year  may  have  been  totally  and  per- 

manently  injured  and  may  remain  so  fur  a  maximum  period  of  fifty  years,  we  will 

say.     The  way  that  induces  prevention  is  this:  in  spite  of  the  natural   tendency 

of  this  thing  to  increase  in  this  way,  that  increase  may  be  off-set  by  causing  the 

number  of  accidents  to  be  fewer  and   fewer  relatively,  thereby  having  something 

at  work  which   lends  to  reduce  I  he  cos!    precisely  as  the  other  tends  to  increase 

it.     A  good  instance  of  thai  is  the  railroad,  and  perhaps  I  can  turn  that  up  for  you. 


1912  WORKMEN'S  COMPENSATION   COMMISSION.  453 

Me.  Wegenast:  I  think  there  is  the  beer  bottling  industry,  too? 

Mi;.   Dawson:  The  railroads  started  in  at  38  cents. 

Mr.  Wegenast:  39-100  of  one  per  cent,  on  the  pay  roll.  The  next  year 
79-100  of  one  per  cent. 

Mr.  Dawson:  That  is  in  my  statement  there.  39-100  the  first  year;  next 
year.  79-100;  third  year,  $1.25;  fourth  year,  $1.38;  and  by  the  end  of  the  eighth 
year  it  was  $1.80.  Then  prevention  began  to  effect  it  gradually,  and  it  declined 
for  a  few  years,  notwithstanding  the  burden  caused  by  accidents  in  the  previous 
years,  to  as  low  a  figure  as  $1.26. 

Me.  MacMurchy:  What  year  was  that? 

Mr.  Dawson:  I  haven't  the  exact  year,  but  I  think  it  was  about  the  15th  or 
16th.  After  twenty-four  years  it  has  been  standing  about  $1.80  for  a  number  of 
years  and  showing  no  signs  of  rising. 

Mr.  Wegenast  :  So  that  the  rapid  rise  in  the  rates  for  the  first  few  years  calls 
the  attention  of  the  employer  to  the  necessity  of  prevention. 

Mr.  Dawson  :  Exactly.  There  is  a  standing  impetus  there  under  that  system 
to  cause  him  to  do  everything  in  the  world  he  can  to  reduce  it,  and  it  has  so  oper- 
ated always. 

Mr.  Wegenast:  You  have  given  several  examples  of  rates  which  reached 
their  maximum  within  ten  or  fifteen  years,  instead  of  running  as  they  would 
under  the  actuarial  tables  to  a  maximum  in  twenty-five,  thirty,  or  forty  years. 

Mr,  Dawson  :  Yes,  there  are  several  other  instances  besides  the  railways 
where  that  has  been  true. 

Mr.  Wegenast:  You  also  made  the  statement,  I  think,  that  the  initial 
rate  would  be  in  the  neighbourhood  of  twenty  per  cent,  of  what  the  normal  rate 
should  be? 

Mr.  Dawson:  That  is  not  far  from  the  fair  average.  In  some  industries 
where  a  larger  proportion  of  the  accidents  result  in  serious  disability  it  might  even 
he  a  little  less  than  that,  and  in  some  industries  where  a  larger  proportion  of  the 
accidents  result  in  death  it  might  be  somewhat  more. 

Mr.  Wegenast  :  Then  the  current  cost  plan  has  this  advantage,  that  it  is  not 
so   great   an   immediate  strain   upon   the   employers? 

Mr.  Dawson  :  That  is  one  of  its  most  marked  advantages  and  believed  to  be 
one  of  the  reasons  why  it  has  operated  so  well  in  Germany. 

Mr.  Wegenast  :  Then  you  are  an  actuary  of  experience  and  standing  through- 
out the  continent  of  course? 

Mr.  Dawson:  Thou  sayest  it,  not  I. 

The  Commissioner:  We  take  that  for  granted. 

Mr.  Wegenast  :  You  are  quoted  in  these  briefs  and  are  now  making  a  state- 
ment that  you  deem  this  plan  consonant  with  correct  actuarial  practice? 

Mr.  Dawson:  Under  a  compulsory  system  it  is  not  only  in  my  judgment  as 
sound  as  the  capitalized  value  plan,  but  sounder,  and  a  more  reliable  and  wiser 
plan. 

Mr.  Wegenast:  So  that  from  the  actuarial  standpoint  alone  it  is  superior 
to  the  capitalized  plan? 

Mr.  Dawson:  Under  compulsion  it  is  in  my  opinion. 

Mr.  Wegenast  :  Then  what  about  the  objections  to  it  as  being  an  assessment 
form  of  insurance,  and  the  parallel  that  may  be  drawn  between  it  and  assessment 
life  insurance? 


454  MINUTES  OF  EVIDENCE:  No.  65 


Me.  Dawson:  I  stated  it  last  evening,  that  assessment  life  insurance  would 
be  perfectly  safe  under  compulsion,  and  would  also  be  almost  level  in  cost,  the  vari- 
ations merely  being  those  variations  that  take  place  in  the  death  rate  in  the  com- 
munity or  province  or  country  from  year  to  year  owing  to  better  sanitary  or  better 
health  conditions. 

Mk.  Wegenast  :  What  would  you  say  as  to  this  feature,  Mr.  Dawson  ?  Would 
you  regard  it  as  advisable  to  begin  a  system  which  would  include  certain  classes 
of  employers,  we  will  say,  or  employers  employing  a  certain  number  of  em- 
ployees  ? 

The  Commissioner:  He  told  us  that  last  night. 

Mr.  Wegenast:  I  am  getting  at  something  a  little  different,  your  Lordship. 
Would  you  regard  it  as  advisable  to  establish  a  system  along  the  lines  which  you 
recommend  covering  only  a  part  of  the  employers  rather  than  to  introduce  an  in- 
dividual liability  system  covering  all  employers? 

Mr.  Dawson  :  I  regard  an  individual  liability  system  covering  all  employers 
as  a  mistake  in  every  sense,  and  as  necessarily  perpetrating  a  number  of  very 
serious  injustices.  I  might  give  you  an  instance  such  as  this:  suppose  a  law 
passed  rendering  all  employers  liable  for  injuries,  say  even  to  household  servants 
and  other  household  employees.  It  is  quite  conceivable  that  some  working  man 
who  had  never  had  an  employee  before  on  account  of  the  sudden  illness  of  his 
wife  would  call  one  in,  utterly  ignorant  that  he  was  incurring  any  liability  at  all, 
and  an  accident  occurred,  and  this  man  has  his  little  home  swept  away  by  the 
liability  thrust  upon  him.  Now,  that  is  not  at  all  what  society  intends,  and  I 
cannot  look  on  it  with  any  real  favour  at  all. 

Mr.  Wegenast  :  If  a  partial  system,  or  a  partially  satisfactory  system  is  to  be 
introduced  as  .preliminary  to  a  larger  system,  or  a  system  giving  better  satisfac- 
tion, you  would  rather  have  a  system  on  this  plan  which  you  advocate  applying 
to  only  a  limited  number  of  employers,  than  to  have  the  larger  system  at  once  on 
the  individual  liability  basis? 

Mr.  Dawson:  Personally,  I  should  say  yes. 

Mr.  Wegenast  :  What  would  you  say  as  to  a  law  covering  four  or  five  em- 
ployees and  over  as  a  beginning? 

Mr.  Dawson:  It  might  not  be  objectionable  as  a  beginning.  I,  personally, 
do  not  see  any  necessity  for  making  that  distinction.  If  a  man  is  an  employing 
contractor,  for  instance,  he  may  employ  only  one  or  two  men,  but  I  see  no  reason 
why  he  should  not  be  covered  by  an  insurance  law. 

Mi,\  Wegenast:  I  was  not  thinking  of  the  logic  of  it  so  much  as  the  prac- 
tical difficulty  of  setting  the  scheme  in  operation.  Would  you  have  any  objection 
from  a  practical  standpoint  of  beginning  a  system  with  five  persons  and  over,  and 
wIkmi  the  insurance  department  gets  fairly  under  way  adding  the  rest -as  it  was 
found  desirable,  and  as  public  opinion  called  for  it? 

Mr.  Dawson:  I  am  not  convinced  of  the  necessity  for  it. 

Tin;  Commissioner:  I  have  some  figures  here  which  perhaps  might  help.  It 
is  estimated  that  in  this  Province  there  are  eight  hundred  factories  employing  over 
five  hands,  and  the  aggregate  of  the  number  of  the  employees  is  90,000.  There 
are  only  400  of  the  smaller  industries  employing  less  than  five,  and  the  total  num- 
ber of  employees  is  2,000.  You  see.  if  these  figures  are  at  all  accurate,  they  show 
it   is  only  a  small  percentage  (hat   would   not  come  under  it. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  455 

Mr.  Dawson  :  That  makes  it  more  nearly  a  practical  thing  to  omit  them,  and 
at  the  same  time  it  renders  it  not  very  difficult  to  include  them. 

The  Commissioner:  Would  you  not  have  a  very  serious  condition  if  a  man 
is  worMng  in  one  place  with  five  hands  and  he  is  provided  for,  and  a  man  next 
door  with  four,  and  he  gets  nothing?    It  would  make  the  law  unpopular  at  once. 

Mr.  Dawson:  Your  Lordship  has  put  the  matter  very  much  better  than  I 
could.    It  is  an  arbitrary  distinction  which  will  not  be  satisfactory  in  the  end. 

The  Commissioner:.  The  only  thing  would  be  whether  it  was  expedient  on 
account  of  the  smallness  of  it,  but  that  leaves  the  employee  in  trouble. 

Mi;.  Wegenast:  If  there  is  to  be  any  restriction  in  the  act  at  present  you 
would  prefer  to  make  the  difference  between  occupations  rather  than  on  the  basis 
of  the  number  of  employees? 

Mi;.  Dawson:  Yes,  1  should  think  that  would  be  perhaps  very  desirable. 

Mr.  Wegenast:  Excluding  in  the  meantime  such  occupations  as  domestic 
servants  and  agricultural  employees? 

Mr.  Dawson:  Possibly  both  of  those  depending  upon  the  sentiment  of  the 
community,  whether  it  is  ready  for  it  or  not. 

The  Commissioner:  There  is  one  class  you  have  got  to  exclude  if  you  want 
to  get  a  law,  and  that  is  the  farmer. 

Mr.  Dawson:  They  did  exclude  them  in  many  countries  when  the  laws  first 
went  in,  and  in  some  countries  they  are  still  excluded.  One  of  the  most  peculiar 
things  about  the  farmers  is  what  has  taken  place  in  Bavaria.  The  kingdom  of 
Bavaria,  in  Germany,  has  extended  the  insurance  law  further  than  the  regular 
insurance  law  of  the  empire,  by  embracing  the  employing  farmer,  as  well  as  the 
employee,  and  requiring  payment  accordingly,  and  that  made  it  in  a  very  short 
time  popular  with  the  farmer.  The  employing  farmer  found  the  insurance  for  him- 
self exceedingly  convenient  to  have,  and  they  considered  the  thing  had  worked  par- 
ticularly well,  and  I  think  it  has  been  copied  in  some  of  the  other  kingdoms.  I 
have  not  examined  the  new  draft  of  the  German  law,  but  I  should  not  be  surprised 
if  it  were  not  extended  over  the  empire. 

The  Commissioner:  How  did  thev  arrange  the  contribution? 

Mr.  Dawson:  It  is  only  an  impression,  but  my  impression  is  that  it  was 
fixed  at  so  much  per  head,  and  where  employees  were  employed  but  a  portion  of 
the  year  it  was  pro-rated  for  the  actual  length  of  time  they  were  employed. 

Mr.  Wegenast  :  Then  you  maintain  your  general  view  as  to  the  collective 
system  or  State  system,  whichever  you  choose  to  call  it,  notwithstanding  Dr.  Frie- 
densburg  ? 

Mr.  Dawson:  Dr.  Priedensburg  is  the  one  man  in  Germany  who  has  such 
prejudices.  I  don't  know  of  any  other.  He  was  a  reactionary  who  was  appointed 
on  the  insurance  Board  because  he  was  a  reactionary.  He  was  very  much  opposed 
to  anything  being  done  about  this  thing,  and  has  always  been  opposed  to  anything 
being  done  about  it.  I  am  informed  by  Dr.  Zacher  that  he  retired  from  the  Board 
on  account  of  what  is  rather  euphemistically  called  extreme  nervousness,  and  on 
accottnt  of  his  attack  he  jumbles  all  sorts  of  criticisms  of  mere  methods  of  doing 
this  little  thing  or  that  little  thing  with  a  constant  tirade  against  the  whole  idea 
of  Workmen's  Compensation,  and  he  ascribed  the  failure  of  Germany  to  assume  her 
proper  place  in  the  world's  market  to  that,  which  is  something  of  a  joke  to  all 
the  rest  of  the  world,  and  then  he  ended  by  stating  that  he  would  be  in  favour  of 
it  being  a  pure  State  insurance. 


456  MINUTES  OF  EYIDEXCE :  No.  65 


Me.  YVegexast  :  I  was  going  to  say  that  his  argument  ends  up  with  a  com- 
plete enclorsation  of  both  the  voluntary  associations  of  employers  idea  and  the 
State  insurance. 

Me.  Dawson:  Yes. 

Me.  Wegenast  :  I  do  not  know  that  there  is  anything  else  of  particular  value 
that  I  wish  to  take  up  with  Mr.  Dawson. 

The  Commissioner  :  Would  your  plan  involve  capitalizing  the  payments  under 
proper  restrictions  in  certain  cases,,  and  paying  the  capital  sum?  Take  the  case 
of  where  death  followed  arid  where  it  was  desirable  to  give  the  payment  so  as  to 
give  them  a  start  in  life? 

Mr.  Dawson  :  I  think  I  would  not  favour  that,  your  Lordship,  for  this  reason, 
that  I  very  much  doubt  that  any  of  these  are  ever  in  a  good  position  to  decide  that 
it  is  desirable,  and  if  it  is  allowed  there  will  be  constant  pressure  brought,  and 
constant  application  for  it.  You  see  the  amount  that  will  be  supplied  is  small.  It 
is  not  a  liberal  living,  and  people  who  are  in  receipt  of  those  little  incomes  are 
certain  to  have  pressure  for  a  little  more  money,  and  they  are  very  enthusiastic 
about  the  future,  but  the  present  is  the  present,  and  consequently  your  Commis- 
sion will  have  constant  pressure  brought  to  bear  upon  them  to  give  way  on  that 
point,  and  it  has  not  been  deemed  wise  to  do  it,  but  wherever  it  has  been  at- 
tempted it  has  been  a  matter  of  great  annoyance. 

The  Commissioner  :  My  experience  for  a  long  time  as  lawyer  and  judge  has 
been  that  very  often  a  father  does  a  great  deal  of  harm  to  his  family 
by  tying  up  his  property,  in  such  a  way  that  it  cannot  be  used  to  the  best  advantage 
for  his  children,  or  for  those  who  are  his  beneficiaries.  Yery  often  cases  have 
occurred  where  the  property  has  had  to  be  kept,  and  these  people  have  been  prac- 
tically in  a  position  of  penury  when  the  capital  sum,  if  it  might  be  drawn  on, 
might  have  eased  them  to  some  extent  at  all  events. 

Me.  Dawson  :  I  have  seen  a  great  many  cases  myself, 

The  Commissioner:  Does  the  same  principle  not  apply  here? 

Mr.  Dawson  :  It  seems  to  me  not  quite,  because  if  the  father  had  lived,  for 
instance,  all  that  he  was  to  that  family  from  a  financial  standpoint  was  one  able 
to  furnish  an  income  to  support  them,  and  we  are  undertaking  to  replace  him  from 
a  financial  standpoint,  not  completely,  but  as  completely  as  we  deem  wise,  under 
such  an  act  in  the  same  position  which  he  occupied.  Now,  there  is  another  ques- 
tion arises  in  that  connection.  There  would  be  pressure  wherever  they  thought 
that  the  person  who  was  receiving  this  income  might  die  soon.  That  is  one  of  the 
things  that  would  cause  them  to  come  and  ask  for  it.  There  are  circum- 
stances under  which  I  think  it  might  be  done,  but  those  circumstances 
should  be,  if  possible,  clearly  laid  down  in  the  law,  or  should  be  such  as  to  cause 
the  Board  to  act  on  its  own  motion  and  not  on  appeal  from  anybody.  For  in- 
stance, it  has  been  deemed  wise  to  make  everybody  so7ue  payment  for  certain  kinds 
of  injuries,  such  as  maiming,  and  the  situation  clearly  arises  that  the  person  is 
capable  of  making  a  living,  even  in  his  maimed  condition,  and  perhaps  it  might 
be  all  right  to  remunerate  for  that  in  a  lump  sum  and  be  done  with  it,  but  with 
that  sole  exception  \  am  of  the  opinion  that  extremely  few  things  would  war- 
rani  it. 

The  COMMISSIONER:  I  was  thinking  more  of  total  dependence?  A  man  is 
injured  and  has  to  leave  the  vocation  Hint  he  has  been  brought  up  to,  nnd  he  sees 
an  opportunity  if  he  has  a  little  capita]  thai  he  is  quite  able  to  undertake  and  he 


1912  WOKKMEN'S  COMPENSATION  COMMISSION.  157 

could  earn  as  good  a  livelihood  as  he  did  before.    Would  it  not  be  a  hard  thing  to 
have  that  money  there  and  not  be  able  to  use  it? 

Mr.  Dawson:  It  is,  but  we  have  to  deal  with  the  principle,  not  the  specula- 
live  case.  I  read  to  you  the  note  of  a  British  judge  that  these  things  were  loop- 
holes. You  must  realize  it  is  a  peculiar  situation  when  the  judge  finds  all  parties 
there  of  the  same  opinion.  One  of  the  difficulties  under  the  British  law,  of  course, 
is  that  it  is  the  employer  himself  on  one  side,  or  the  insurance  company  that  he  is 
insured  in,  and  the  workman  on  the  other,  entirely  agreeing  that  this  is  what  we 
want  to  do.  Of  course  under  this  plan  that  would  not  quite  be  the  case,  because 
there  would  not  be  any  employer  on  the  one  side,  but  it  would  be  a  constant  source 
of  resistance  on  the  part  of  this  Board  of  Appeals  from  the  very  persons  who  are 
receiving  the  benefits. 

The  Commissioner  :  Well,  every  day  the  court  is  doing  this  thing  with  the 
fund  belonging  to  the  infant. 

Mr.  D  wvson:  Yes. 

The  Commissioner :  Advancing  part  of  the  money  for  the  benefit  of  the 
infant. 

Mi;.  Dawson:  But  this  income  should  be  sufficient  in  a  very  modest  and 
moderate  way  actually  to  support. 

The  Commissioner:  We  have  such  applications  as  this.  Perhaps  if  you  limit 
the  age  to  sixteen  when  the  payment  would  stop  it  would  not  be  so  important.  A 
young  woman  wants  to  be  a  school  teacher  or  wants  to  be  a  music  teacher,  or  a 
young  man  wants  to  be  a  doctor.  It  would  be  very  important  to  them  that  they 
should  have  something  to  enable  them  to  get  into  that  profession  or  calling. 

Mr.  Dawson:  Yes,  but  as  you  are  limited  they  really  would  not  come  within 
the  range.  If  you  stop  at  16  or  18  it  would  not  be  within  the  range.  There  is  one 
thing  I  think  warrants  a  lump  sum,  and  that  is  a  very  good  thing  indeed,  and  in 
all  countries  that  have  used  it  T  think  they  are  satisfied  with  it,  and  that  is  to 
offer  the  reward  of  the  lump  sum  of  two  or  three  years'  compensation  to  a  widow 
upon  re-marriage. 

The  Commissioner:  Encourage  her  to  do  that? 

Mr.  Dawson:  Yes.  It  has  worked  well,  and  it  has  worked  with  a  great  deal 
of  satisfaction.  Yet.  notwithstanding  that  feature  in  the  German  law.  where  it 
is  three  years,  the  average  widowhood  is,  to  the  best  of  my  recollection,  a  little 
over  fourteen  years.  Then  they  have  either  remarried  on  the  average,  or  they  die, 
so  that  the  average  is  fourteen  years. 

The  Commissioner  :  Well,  if  that  system  were  adopted  and  the  lump  sums 
paid,  I  suppose  this  annual  assessment  would  have  to  cover  the  capital  sums  that 
were  so  paid. 

Mr.  Dawson:  Yes,  it  would. 

Mr.  Wegenast:  There  is  one  other  feature  with  regard  to  the  current  cost 
system  that  I  would  like  to  raise.  How  do  you  justify  throwing  the  burden  of 
present  accidents  on  the  future? 

Mr.  Dawson:  I  made  some  reference  to  that  last  evening.  In  the  first  place, 
1  think  it  is  justified  by  the  fact  that  the  community  is  now  carrying  and  will 
continue  to  carry  for  nearly  a  generation  to  come  the  burden  of  caring  for  those 
who  have  been  injured,  and  the  families  of  those  who  have  been  killed,  and  it 
seems  unfair,  therefore,  to  superimpose  this  burden  of  an  advance  payment  on 
top  of  that  which  would  gradually  be  running  on.     That  is  just  as  real  as  if  we 


458  MINUTES  OF  EVIDENCE:  No.  65 

were  able  to  measure  it;  it  is  actually  going  on.  Another  reason  is  that  when  the 
premium  reaches  its  highest  point  it  is,  outside  of  merely  the  consideration  of 
the  discounts  on  the  payments  to  be  made  in  the  future,  no  higher  than  the  pre- 
mium of  a  capitalized  value  plan  would  start  at,  and  if  you  figure  the  payments 
would  continue  for  a  period  of  about  six  or  seven  years  the  discount  is  a  very 
small  amount,  and  therefore  it  can  be  dropped  out  of  consideration.  That  is  to 
say  you  do  not  get  any  lower  premium  on  the  capitalized  value  plan  because  of 
having  put  it  into  effect,  outside  of  the  interest  that  the  accumulated  fund  may 
earn,  than  you  do  on  this  assessment  plan  or  current  cost  plan  when  it  has  reached 
its  maximum. 

Mr.  Wegenast:  It  reduces  its  maximum  as  it  runs  along. 

Mr.  Dawson:  As  it  would  have  been  from  the  start  the  other  way.  You  see 
the  thing  that  you  have  done  is  to  enable  the  thing  to  be  passed,  like  all  taxation 
is  to  a  large  extent,  on  to  the  future  generation,  that  generation  being  enabled  by 
the  same  compulsion  to  pass  a  part  of  this  on  to  the  next  generation,  a  system 
which  is  absolutely  unsound  except  under  compulsion. 

Mr.  Wegenast:  Mr.  P.  W.  Ellis  is  here,  and  I  had  thought  he  might  have 
addressed  the  Commission  to-night. 

Mr.  P.  W.  Ellis  :  His  Lordship  read  some  figures  as  to  there  being  some  800 
industries  employing  some  90,000,  and  400  employing  2,000.  In  those 
industries  there  is  a  large  number  of  workmen  who  will  be  setting  up  in  business 
for  tbemselves,  and  the  number  of  industries  employing  from  two  to  four  men  is 
going  to  be  enormously  increased.  In  some  places  there  are  what  are  called  out- 
workers, and  in  many  instances  their  factory  is  their  home,  and  what  I  wanted 
to  know,  Mr.  Dawson,  was  if  you  felt  it  wise  to  exempt  these  people?  I  have 
noticed  conditions  in  Birmingham  where  large  factories  are  idle  to-day,  and  those 
who  were  formerly  producers  and  employing  a  large  number  of  hands  are  pur- 
chasing their  wares  from  these  outworkers,  who  can  produce  them  cheaper  than 
they  can  produce  them  in  their  own  factories.  These  workers  will  work  long  hours 
in  their  own  homes  when  they  will  not  for  an  employer,  and  they  make  their  own 
conditions  much  more  onerous,  and  the  consequence  is  the  employer  who  has  to 
have  restricted  hours  and  all  kinds  of  appliances,  is  being  pushed  out  of  business 
by  these  outworkers,  and  if  they  were  to  be  exempted  from  any  workmen's  com- 
pensation and  the  burden  placed  upon  industry  that  would  still  further  enhance 
the  inability  of  the  employer  who  is  carrying  on  th  regular  factory  system  to 
compete  with  the  out- workers. 

Mr.  Dawson:  I  already  stated  last  evening  that  I  am  not  in  favour  of  ex- 
empting them.  His  Lordship  has  given  a  very  cogent  reason  that  has  not  occurred 
to  me,  and  that  is  the  same  employer  would  have  five  for  instance  one  day,  and 
the  next  day  he  might  have  four,  and  his  employees  could  not  understand  any 
such  situation  as  that,  of  course.  If  I  happened  to  be  injured  yesterday  I  would 
be  compensated,  but  because  I  am  injured  to-day  I  am  not,  right  in  the  same  em- 
ployment. 

Mr.  Ellis:  Take  this  out-worker.  He  has  three  members  of  his  own  family 
working  for  him.    I  suppose  they  would  be  employees? 

Mr.  Dawson:  Well,  that  depends  on  whether  they  are  working  for  wages.  If 
they  are  members  of  the  family  and  simply  clothed  and  fed  by  their  father  it  is 
simply  a  family  affair,  not  coming  within  Ihe  range  of  wage-workers. 

Mr.    Ellis:  I  was  quite  impressed  in  France  with  the  number  of  small  em- 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  459 


ployers.  Of  course  industries  which  require  large  plants  like  the  iron  industry 
■we  do  not  find  small  industries,  for  the  investment  is  too  great,  but  there  are  a 
great  many  industries  that  require  very  little  capital. 

Mr.  Dawson  :  We  have  what  they  call  sweat  shops  in  the  United  States,  but 
they  have  been  growing  into  larger  places.    1  think  it  would  average  ten  at  least. 

Mr.  Wegexast:  Mr.  Ellis  has  been  desirous  of  appearing  before  the  Com- 
missioner, and  has  found  it  difficult,  owing  to  the  pressure  of  other  engagements, 
and  it  might  be  as  well  to  hear  from  Mr.  Ellis  now, 

Mr.  Kingston:  Just  one  suggestion-  Take  the  casual  contractor,  the  man 
for  example  who  comes  from  another  country  to  execute  a  large  contract  involving 
half  a  million,  such  as  the  erection  of  a  very  large  building.  He  comes  in,  and 
he  goes  away  leaving  us  a  legacy  of  a  number  of  accidents  which  will  take  years 
to  work  out.     How  would  you  justify  the  current  cost  plan  in  such  a  case  as  that? 

Mr.  Dawson  :  Well,  I  think  that  is  closer  to  a  poser  than  anything  that  has 
been  asked,  and  I  would  like  to  give  it  further  consideration. 

The  Commissioner:     How  would  you  get  that  man  on  the  tax  roll? 

Mr.  Dawson:  There  would  be  no  difficulty  I  think  about  that,  your  Lord- 
ship, because  he  would  be  subject  to  precisely  the  same  liability  as  everybody  else 
in  this  community. 

The  Commissioner:  But  in  the  laws  in  the  States  they  have  adopted  this 
plan  so  far,  they  have  a  day  in  the  year  upon  which  they  collect  taxes,  October 
or  November. 

Mr.  Dawson  ■  That  does  not  necessarily  follow  as  to  contractors.  It  is 
easy  enough  to  require  an  investigation  of  how  much  labour  is  involved  on  that 
contract,  and  accurately  base  his  premium  on  that  and  collect  it. 

The  Commissioner  :     No  doubt  if  you  find  him  you  could  collect  your  rate  ? 

Mr.  Dawson  :  Contractors  are  generally  open  enough  and  prominent  enough. 
You  could  make  a  registration  law. 

The  Commissioner:  Isn't  the  answer  this,  that  it  does  not  fall  on  the 
back  of  the  employer,  it  falls  upon  the  body  of  the  community? 

Mr.  Dawson  :  That  is  unquestionably  the  case,  and  that  is  perhaps  the 
correct  answer.  I  had  never  considered  the  particular  type  of  thing  which  was 
there  described  to  me,  although  I  know  it  must  be  happening  in  every  country. 
My  impression  is  that  in  Germany  they  have  always  treated  it  just  like  every 
other  case. 

Mr.  Kingston  :  Could  you  not  make  a  system  somewhat  elastic  so  that  in 
a  case  of  that  sort  the  Board  might  have  discretion  to  charge  a  rate  which  would 
represent  a  capitalized  value? 

Mr.  Dawson:  Of  course  it  could  be  specified  in  the  act  if  an  alien  con- 
tractor had  come  into  the  Province,  and  I  am  afraid  it  would  mean  a  foreign 
contractoT  from  some  other  Province,  that  the  premium  collected  from  him  should 
be  on  a  capitalized  basis  and  should  correspond  to  the  labour  involved  in  his  con- 
tract. That  could  be  done.  T  think  it  would  work  out  all  right  on  the  whole 
anyway.     I  don't  think  it  would  make  any  great  difference. 

Mr.  Kingston:  You  could  make  it  so  that  such  a  contractor  could  not 
get  another  contract  in  the  country  unless  he  paid  the  premium? 

Mr.  Dawson:  Under  the  new  contract  he  would  be  paying  the  rate,  and 
if  the  rates  were  increased  he  would  be  paying  the  increased  rate. 

The  Commissioner:  Is  this  not  so  big  a  scheme  that  these  things  do  nol 
count  much? 


160  MIXUTES  OF  EVIDENCE:  Xo.  65 


Mr.  Dawson  :  I  think  they  cannot  have  counted  much  or  me  issue  would 
have  been  raised  to  me  in  some  way,  either  in  writing  or  in  conversation. 

The  Commissioner  :  If  Mr.  Wegenast  is  right  about  the  four  to  six  millions 
what  would  this  little  thing  amount  to  in  that  amount? 

Mr.  Kingston:  The  instance  I  raised  was  possibly  where  it  would  mean 
half  a  million  dollars  in  the  contract. 

Mr-  Miller:  You  see  we  have  the  Fuller  Company  erecting  the  C.P.E. 
offices,  and  that  is  a  very  big  contract. 

Mr.  Doggett:  He  would  be  in  a  similar  position  to  the  employer  who 
went  out  of  business? 

Mr.  Dawson:  Yes,  the  only  difference  would  be  that  the  employer  who 
went  out  of  business  would  be  succeeded  by  some  employer,  probably,  in  the 
Province  who  would  go  on  with  some  of  the  business,  either  that  business  or  a 
similar  one,  and  in  addition  the  employer  would  not  go  into  business  with  the 
intention  of  going  out,  while  this  contract  is  only  entered  into  for  a  limited 
number  of  months,  and  then  is  over.  I  am  not  sure  that  it  would  be  improper 
to  put  into  the  bill  some  provision  dealing  with  special  cases  of  that  sort. 

Mr.  Doggett  :  There  is  generally  a  sub-contractor  working,  or  different  sub- 
contractors. The  sub-contractors  might  invariably  be  local  men,  and  you  could 
get  them. 

Mr.  Kingston  :  The  difficulty  only  arises  the  first  years.  As  the  years 
increase  the  amount  is  getting  nearer  to  the  capitalized  rate. 

Mr.  Bancroft  :  The  point  has  been  raised,  and  the  question  was  asked 
Mr.  Boyd  as  to  whether  he  had,  and  I  would  like  to  ask  you  whether  you  had 
found  in  your  investigations  at  any  time  where  a  workman  was  proved  to  have 
injured  himself  for  the  purpose  of  getting  compensation? 

Mr.  Dawson:  There  have  been  such  cases,  but  they  are  not  numerous.  It 
was  expected  there  would  be  a  tremendous  amount  of  simulation,  but  there 
has  not  been  so  much. 

Mr.  Ellis  :  Take  a  case  like  this,  in  localities  where  short  work  is  pre- 
valent and  continued  year  after  year,  and  where  men  are  suffering  from  starvation 
almost.  You  can  realize  the  uninjured  man  without  the  wherewithal  might  be 
a  charge  on  charity,  and  you  would  have  his  neighbour  who  had  been  injured 
enjoying  a  pension. 

Mr-  Dawson:  Yes.  You  remind  me  of  one  thing  that  is  evident  in  the 
German  system.  They  used  to  attribute  the  enlarged  claims  against  the  sickness 
insurance  societies  particularly  to  simulation  and  malingering.  That  is  a  large 
claim  arising  where  there  was  considerable  unemployment,  and  of  course  some 
part  of  it  is  undoubtedly  attributable  to  that,  but  they  tell  me  that  as  a  result  of 
very  careful  investigation  which  has  been  conducted  by  both  employers  and  em- 
ployees, the  following  is  the  true  explanation  of  the  larger  part  of  it,  that  while 
full  work  is  going  on  the  poor  fellow  that  really  ought  to  have  laid  off  keeps 
going  because  he  can  get  full  wages,  and  the  fact  is  that  in  most  cases  they  ought 
to  have  been  been  laid  up  longer  than  they  were. 

The  Commissioned  Thai  is  hardly  the  case  Mr.  Ellis  is  putting.  He  is 
putting  the  case  of  a  time  when  there  is  nut  much  work,  and  one  man  who  has 
been  on  the  fund  gets  compensation,  and  the  able-bodied  man  who  is  able  to 
work  lias  to  go  starving.  It  seeems  to  me  the  answer  to  that  is  that  if  this 
principle  is  sound   the  corollary  of  it    is   insurance  againsl    unemployment. 

Mi;.  Dawson-:  In  the  end  I  think  thai  is  true,  bu1  it  will  take  quite  a 
time   to   read]    it.     1    would    like    to   sec   the    British    experiment    carried    further 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  461 


before  I  would  like  to  see  anybody  copy  it.  I  may  say,  your  Lordship,  before 
the  British  system  was  even  thought  of,  I  had  stated  to  the  highest  authority 
on  employment  insurance,  a  gentleman  in  Belgium,  that  in  my  judgment  the 
way  to  Jo  it  was  compulsory  and  national,  that  the  trouble  with  all  local  systems 
was  they  were  very  much  more  liable  to  local  depressions  that  would  ruin  the 
tiling  than  a  depression  through  a  whole  nation- 

Mr.  Bancroft  :  The  man  would  not  get  compensation  unless  he  was  injured 
either  permanently  or  temporarily. 

Mr.  Dawson  :  But  I  understood  Mr.  Ellis  to  say  whether  there  might  not 
be  an  increased  amount  of  simulation  and  malingering  due  to  decreased  employ- 
ment, and  I  have  answered  there  always  has  been  under  all  these  systems  an 
increased  number  of  applications  for  benefits  on  funds  when  there  was  a  consider- 
able amount  of  unemployment.  There  is  no  question  about  that.  At  first  it 
was  supposed  that  nearly  all  of  that  was  simulated  or  pretended  accidents  or 
pretended  sickness,  but  the  conclusion  now  is  that  while  some  part  of  it  is  that, 
a  very  considerable  part  of  it  is  due  to  the  employee  having  kept  at  work  desper- 
atelv  in  order  to  get  his  wages  when  he  ought  really  already  to  have  been  on  the 
sick  list.  That  does  not  apply  so  much  to  accidents  because  unless  the  employee 
has  purposely  caused  himself  to  be  injured  to  get  on  the  list  there  is  no  such 
thing  as  getting  on  the  list. 

Mr.  Ellis:  Mr.  Bancroft  raised  the  point  that  it  was  hardly  conceivable 
that  any  man  would  wish  to  injure  himself  for  the  sake  of  the  pension  that  would 
arise  from  it.  A  case  occurred  in  Toronto,  I  believe,  where  a  person  allowed  a 
street  railway  car  to  run  over  him  in  order  that  he  might  collect  his  accident 
insurance.  He  was  in  distress.  The  accident  insurance  company  set  up  the  de- 
fence that  it  was  apparently  an  accident,  but  that  as  a  matter  of  fact  it  was 
intentional  on  his  part. 

The  Commissioner  :     Would  that  not  be  one  case  in  a  hundred  thousand? 

Mr.  Bancroft:     Mr.  Boyd  I  think  said  one  per  cent. 

Mr.  Dawson  :  The  simulation  and  malingering  together  would  be  more  than 
one  per  cent.,  simulation  meaning  either  actually  causing  yourself  to  be  injured, 
or  else  setting  up  a  pretence  to  be  injured,  and  malingering  meaning  hanging  on 
after  you  were  really  ready  to  go  to  work.  Those  undoubtedly  involve  more  than 
one  per  cent.,  but  actual  maiming  or  serious  injuries  to  a  workman  for  the  pur- 
pose of  obtaining  the  benefit  is  very  rare.  That  is  very  much  less  than  one  per 
cent.,  but  it  does  happen  once  in  a  while.  You  take  outside  of  unemployment 
and  conditions  such  as  you  speak  of  and  it  is  a  moral  condition.  There  are  some 
shirks  in  the  world,  and  we  must  acknowledge  that  fact-  They  are  no  good  at 
work,  and  probably  the  employer  would  be  better  off  to  put  him  on  a  pension  and 
turn  him  out,  and  such  people  sometimes  have  been  known  to  maim  themselves  in 
order  to  get  on  these  lists,  and  when  those  facts  are  discovered  they  do  not  get  on, 
that  is  all. 

Mr.  Bruce:  In  your  investigations.  Mr.  Dawson,  a  minute  ago  you  made 
a  statement  there  was  an  increase  in  the  claims.  Is  that  not  really  due  to  the 
application  of  the  Act  to  a  man,  instead  of  his  having  to  go  to  litigation  to  claim 
for  his  injuries?  Take  a  man  losing  two  or  three  fingers  in  some  machine,  he 
could  draw  his  benefits,  and  go  back  to  work  and  receive  his  remuneration  from 
his  work,  rather  than  take  the  smaller  remuneration  that  he  would  get  under  the 
act? 

Mr.  Dawson  :     Under  the  German  rule  he  would  be  paid  full  benefits  during 


462  MINUTES  OF  EVIDENCE:  No.  65 


the  time  he  was  unable  to  work,  and  when  he  did  go  back  to  work  he  would  still 
be  paid  some  benefit  for  his  impaired  condition. 

The  Commissioner:     Even  though  he  were  earning  full  wages? 

Mr.  Dawson  :  If  he  were  able  to  earn  absolutely  full  wages  the  benefit  would 
stop.  In  Austria  he  would  get  some  benefit,  because  they  determine  the  com- 
pensation on  the  fact  of  the  injury. 

Mr.  Wegenast:     Do  you  approve  of  that? 

Mr.  Dawson:  The  associations  of  Germany  so  far  have  been  unwilling  to 
adopt  it.  In  Austria  they  are  loud  in  its  praises.  They  say  they  had  all  sorts 
of  difficulty  in  determining  the  amount  of  impairment  of  earning  power  and 
holding  it  over.     For  myself  I  besitate  to  say. 

Mr.  Wegenast  :  Take  the  case  of  a  young  man  who  is  injured,  who  perhaps 
loses  his  arm,  and  is  forced  thereby  into  some  profession,  would  the  systems  in 
Germany  and  Austria,  for  instance,  pay  him  his  pension? 

Mr.  Dawson:  Under  the  system  in  Germany  as  soon  as  by  the  assistance 
of  the  employers'  associations  he  had  been  put  in  a  position  so  he  could  reliably 
and  continuously  earn  as  much  money,  or  more  money,  than  before,  he  would  go 
off  the  list  entirely.  In  Austria  on  the  contrary  the  amount  of  his  benefit  would  be 
a  certain  percentage  of  his  wages,  which  in  the  case  you  speak  of,  the  loss  of  an 
arm.  whenever  it  was  found  he  was  capable  of  supporting  himself  continuously, 
even  on  a  much  lower  scale,  would  be  cut  off  entirely,  but  given  a  capitalized 
value  for  it,  a  commuted  value.     That  is  the  difference  between  the  two  systems. 

The  Commissioner:  What  do  you  think  of  the  British  system  that  pro- 
vides for  periodical  revision  of  the  rates? 

Mr.  Dawson:     All  good  systems  do  that.     I  certainly  should  favour  it. 

Mr.  Bancroft  :  We  find  probably  the  most  important  conference  that  has 
ever  happened  in  Great  Britain  is  happening  to-day  in  the  Labour  Party. 

The  Commissioner:     That  is  a  pretty  strong  assertion,  Mr.  Bancroft. 

Mr.  Bancroft:  What  I  should  have  said  is  as  far  as  the  workers  are  con- 
cerned. There  has  been  a  resolution  submitted  by  probably  the  most  important 
Trades  Council,  which  says  something  like  this,  if  I  remember  the  words  correctly, 
that  owing  to  the  injustice  under  the  individual  insurance  of  employers  and  lia- 
bility companies  we  press  the  parliamentary  Labour  Party  to  seek  for  legislation 
to  make  compulsory  insurance  by  employers  in  this  State. 

Now,  if  that  was  done  would  the  British  Act  then  meet  with  your  views  on 
workmen's  compensation? 

Mr.  Dawson:  The  British  Act  on  the  whole  is  a  pretty  liberal  act  if  it 
were  carried  on  a  State  system.  I  personally  feel  that  one  of  the  serious  defects 
of  the  act  has  been  clothing  the  local  judges  with  power  to  approve  settlements 
or  lump  sums,  and  that  is  the  opinion  of  those  judges  themselves.  In  some  other 
respects  it  might  require  revision,  but  it  would  be  a  pretty  good  act  if  it  were 
operated  through  a  compulsory  system. 

The  Commissioner:     I  thought  you  started  with  "if." 

Mr.  Dawson:     I  say  if  it  were  operated  on  a  State  insurance  system. 

The  Commissioner:  That  is  what  he  means.  I  understand  it  means  the 
employer  being  required  to  insure  against  his  liability  to  the  State. 

Mr.  Dawson:     That  is  what  he  said,  but  T  think  the  other  is  what  he  meant- 

The  Commissioner:     Practically  it  is  the  same  scheme  as  has  been  outlined. 

Mr.  Bancroft:  Exactly.  What  I  wanted  to  get  at  is,  if  'that  was  put 
into   the   legislation    does   Mr.   Dawson    think   that   that  would   be  the   means   of 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  463 

inducing  the  employers  over  there  to  form  the  same  mutual  trade  associations  as 
they  have  in  Germany? 

Mr.  Dawson:  Well,  I  should  say  if  they  introduced  any  system  at  all  of 
State  insurance  in  Great  Britain,  a  country  with  a  very  large  population,  and 
of  highly  developed  industries,  they  in  all  probability  would  follow  the  German 
system  with  such  changes  as  were  found  to  be  desirable  under  British  conditions. 

Mr.  Bancroft:  Then  the  argument  against  the  British  Act  that  it  does 
not  make  for  the  prevention  of  accidents  by  invention  as  it  does  in  Germany 
would  be  removed? 

Mr.  Dawson:     Undoubtedly,  if  they  had  those  associations. 

Mr.  Wegenast:  Is  it  your  idea  to  compel  the  employer  to  insure  in  a  private 
company? 

Me.  Dawson:  No,  to  insure  in  an  organization  set  up  by  the  State,  not 
necessarily  with  a  State  Board,  because  it  may  be  these  mutual  associations  which 
the  Government  requires  to  be  formed  as  in   Germany. 

The  Commissioner:     But  not  individual  collective  insurance? 

Mr.  Dawson  :     Not  individual  collective. 

Mr.  Doggett  :  Take  the  case  of  two  employers.  One  uses  dangerous  ap- 
pliances in  his  factory,  and  another  manufacturer  manufacturing  the  same  com- 
modity does  not  use  those  dangerous  appliances.  Do  you  think  those  two  manu- 
facturers should  both  pay  the  same  rate  for  State  insurance? 

Mr.  Dawson  :  No,  indeed.  There  should  be  given  power  to  the  Commission 
which  would  have  charge  to  make,  within  reasonable  limits,  lower  rates  for  those 
who  equip  their  factories  with  the  best  appliances,  and  higher  rates  for  those 
who  have  dangerous  conditions. 

Mr.  Bancroft:  I  think  this  is  one  of  your  works  along  with  Mr.  Frankel. 
Would  you  mind  explaining  those  two  features,  the  State  Executive  Boards  for 
State  employees. 

Mr-  Dawson:  Well,  that  is  very  plain.  The  State  itself  insures  it?  own 
employees,  you  see,  and  sets  up  a  State  Board. 

Mr.  Bancroft:     They  have  representatives  if  they  contribute? 

Mr.  Dawson:     I  am  not  positive,  but  I  think  not. 

Mr.  Kingston:  You  would  include  State  employees  in  such  a  system  as 
you  speak  of? 

Mr.  Dawson:     I  think  so.     I  think  it  would  be  only  fair. 

The  Commissioner:  Would  the  argument  with  which  you  have  supported 
your  thesis  apply  at  all  or  with  the  same  force  to  municipalities  or  Governments 
employing  labour? 

Mr.  Dawson:  Yes,  except  of  course  if  you  desire  to  do  it  you  could  omit 
them  from  the  insurance  plan.  I  do  not  know  but  it  would  be  quite  as  well  to 
omit  them  and  allow  the  municipality  and  the  State  to  make  its  adjustments 
directly.  If  you  took  that  course  perhaps  it  would  be  well  to  clothe  this  Com- 
mission with  power  to  make  adjustments  because  it  would  have  the  best  machinery 
for  it,  and  then  simply  let  the  money  paid  out  be  raised  by  taxation  in  such  man- 
ner as  may  be  deemed  proper- 

Mr.  Wegenast  :  That  would  not  work  where  they  compete  with  private 
concerns. 

Mr.  Dawson:  It  would  not  make  any  difference.  They  would  pay  just  as 
much  one  way  as  the  other.  The  only  reason  I  speak  of  it  is  they  would  have  a 
sufficiently  large  number  of  employees  to  get  averages.  It  would  work  out  all 
right. 


464  MINUTES  OF  EVIDENCE:  Xo.  65 

Me.  Kingston  :  If  they  know  how  much  they  have  to  pay  they  know  how 
much  to  levy. 

Me.  Dawson:  It  might  be  better  to  include  them  in  an  insurance  scheme, 
but  I  can  understand  that  private  employers  might  complain  very  bitterly  if  the 
State  contributed  more  claims  than  it  did  money  for  even  a  single  year. 

The  Commissioner:  How  long  would  it  take  for  an  actuary,  the  data  being 
given  to  him,  to  give  a  financial  basis  for  this,  a  rate  to  start  with,  and  classify 
the  industries? 

Mr.  Dawson:  Oh,  I  should  think  it  could  be  done  in  ninety  days  clear- 
It  would  be,  of  course,  as  suggested  already  to  your  Lordship,  merely  a  rough  thing, 
and  the  correctness  of  it  would  be  judged  by  its  efficiency,  not  by  its  being  accurate. 
It  might  even  be  done  in  a  shorter  period  if  all  the  material  were  at  hand  It  is 
mainly  a  matter  which  would  call  for  careful  consideration  and  discrimination. 
It  might  be  hit  off  in  a  few  clays  correctly,  but  I  should  feel  I  should  like  to 
sleep  over  it,  and  take  it  up  again,  and  work  over  it,  and  make  sure. 

The  Commissioner:     The  classification  would  take  some  time? 

Mr.  Dawson:  Yes,  but  as  already  has  been  suggested  it  would  not  take  so 
long  as  would  be  the  case  if  there  were  not  elaborate  classifications  already  in 
existence  that  could  be  used  as  a  basis,  though  I  would  not  like  to  accept  them 
absolutely. 

Mr.  Wegenast:  There  is  this  obvious  remark  which  I  would  like  to  have 
you  confirm,  Mr.  Dawson,  that  the  systems  we  have  in  some  of  our  Provinces  now 
based  on  the  British  Act  are  not  likely  to  be  permanent,  judging  from  experience 
in  other  countries. 

Mr.  Dawson:  I  think  that  is  true.  For  instance,  at  the  International 
Conference  in  Eome  a  few  years  ago,  representatives  from  countries  that  had 
strongly  opposed  the  idea  of  compulsory  insurance,  distinguished  men  who  had 
attended  that  Congress  session  after  session,  arose  one  after  another  and  acknow- 
ledged they  were  entirely  persuaded  that  was  the  way  to  deal  with  this  question. 
and  as  you  know  the  tendency  in  Great  Britain  in  the  last  two  years  has  gone 
tremendously  in  that  direction,  even  so  far  as  to  awaken  some  apprehensions  as 
to  whether  it  has  not  gone  too  rapidly- 

Mr.  Bancroft:     Which  direction  do  you  think  it  will  take? 

Mr.  Dawson  :     Towards  State  insurance  or  national  insurance. 

Mr.  Bancroft:     That  is  the  tendency  all  over  the  world. 

Mr.  Dawson:     I  thinks  so. 

The  Commissioner  :  Do  I  understand,  Mr.  Dawson,  that  you  had  to  do  with 
the  drafting  of  this  act? 

Mr.  Dawson  :  jSTo,  I  had  been  requested  to  draft  the  bill  with  those  mutual 
associations. 

The  Commissioner:  I  see  they  favour  the  French  system  of  dissecting  the 
human  body  into  its  parts. 

Me.  Dawson:  It  is  based  rather  on  the  Austrian  system-  It  is  imperfectly 
done. 

The  Commissioner:     Quebec  has  done  the  same  thing  here. 

Mr.  Kingston:  Would  you  favour  clothing  such  a  Commission  as  suggested 
with  a  sort  of  quasi-judicial  discretion  dealing  with  such  cases  as  malingering 
and  simulation? 

Mr.  Dawson:  Oh  yes,  I  should  clothe  them  with  power  to  revise  at  the 
end  of  fixed  intervals,  and  more  frequently  if  some  special  occasion  arose  for  it. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  465 


The  Commissioner:  Surely  that  would  arise  in  determining  whether  there 
was  a  claimant  on  it. 

Mr.  Dawson:  It  would  be  very  uncomfortable  if  the  Commission  had 
granted  a  certain  amount  as  a  disability  benefit  deeming  that  the  man  was  per- 
manently disabled  and  then  they  heard  that  tins  same  fellow  had  gone  to  work 
and  was  earning  as  large  wages  as  before.  It  would  be  peculiar  if  they  could 
not  call  that  case  up  and  stop  it. 

Mi;.  Gibbons:  Supposing  they  had  granted  a  certain  compensation  and 
found  out  the  accident  was  more  serious  than  they  at  first  considered? 

Mr.  Dawson  :     They  would  revise  in  that  case  also. 

The  Commissioner  :     That  is  provided  for  in  the  British  Act. 

Mr.  Wegenast:     Does  it  work  out  in  the  British  Act? 

Mr.  Dawson:  Not  so  much  because  there  is  such  a  strong  tendency  over 
there  to  get  the  lump  sum  settlement  confirmed.  You  see  the  Employers'  Lia- 
bility Insurance  Company  is  interested  in  getting  off  as  cheaply  as  possible.  This 
is  anything  but  strange,  especially  when  they  are  losing  money  already  on  the 
husiness. 

Mr.  Kingston  :     It  is  not  so  much  that  as  to  get  the  obligation  off  the  books. 

Mr.  Dawson  :  Partly  that,  too.  They  start  right  out  on  the  basis  that  they 
want  to  get  settlement,  and  just  as  a  fire  insurance  adjuster  generally  does,  they 
generally  use  the  argument,  namely,  we  don't  think  your  injuries  as  great  as  you 
think  they  are.  and  they  also  raise  questions  as  to  whether  it  comes  under  the 
act.  and  whether  you  haven't  done  something  that  will  exclude  you  from  it, 
and  they  use  that  as  a  means  of  getting  a  compromise.  Then  on  the  other  side 
you  have  the  great  anxiety  of  the  average  person  to  get  a  bunch  of  money,  and 
the  two  things  bring  them  up  before  the  judge  with  a  proposition,  and  they  say, 
we  are  all  agreed  on  it :  everybody  has  gone  into  this  and  we  are  quite  satisfied 
that  this  is  the  right  amount.  Then  usually  a  man,  as  your  Lordship  suggested, 
thinks  he  can  go  into  some  little  business  with  it,  or  do  something,  and  there  you 
are. 

The  Commissioner:  You  gave  us  the  figures  as  to  the  percentage  of  the 
premium,  I  think  that  goes  to  the  place  that  it  is  intended  to  go,  or  was  that  Mr. 
Boyd  ? 

Mr.  Dawson:  I  think  Mr.  Boyd  did,  and  I  think  I  did  also.  I  can  send 
you  the  last  report  on  that  subject  published  by  a  leading  insurance  journal  in 
Great  Britain.  In  Great  Britain  the  avowed  expense  is  about  36  to  38  per  cent, 
of  the  premiums.  They  do  not,  however,  include  the  expense  of  adjusting  claims, 
or  litigation,  and  it  is  estimated,  I  am  reliably  informed,  that  that  is  nearly  if  not 
quite  another  15  per  cent.  In  the  United  States  it  is  51  per  cent-  There  was 
an  investigation  made  by  myself  of  the  figures  for  1909. 

The  Commissioner:  I  think  Mr.  Boyd  told  us  it  was  a  minimum  of  6 
to  a  maximum  of  16  per  cent,  of  the  premiums  that  went  into  the  pockets  of  the 
workmen. 

Mr.  Davvsox:  I  do  not  know  on  what  he  would  base  that.  I  will  tell  you 
my  own  judgment  about  it.  The  amounts  that  the  workmen  are  actually  receiv- 
ing is  hard  to  get  at  because  we  do  not  know  how  much  has  been  lost  between  the 
company  and  the  workman  because  of  payments  to  the  workman's  attorneys,  and 
his  costs,  and  all  those  things,  but  the  total  proportion  of  the  premiums  paid  the 
liability  companies  in  the  United  States  which  in  the  year  1909  went  to  the 
workmen,  or  went  in  the  payment  of  claims,  was  about  35  per  cent.  Of  the 
35  per  cent,  even  most  of  the  employers'  liability  companies  acknowledged  that 
30  l. 


±66  MINUTES  OF  EVIDENCE:  No.  65 

nearly  if  not  quite  ten  per  cent,  is  lost  by  the  workman  in  the  process  of  adjust- 
ment in  one  way  or  another,  leaving  about  twenty-five  per  cent,  of  the  total 
premium  which  probably  reaches  the  workmen  and  their  families-  That  is  how- 
ever, only  a  rough  estimate;  nobody  knows 

Mr.  Kingston  :  Is  there  anything  in  any  of  the  European  acts  which  deals 
with  the  question  of  an  extra  allowance  for  medical  expenses  or  hospital  expenses 
other  than  by  that  first  aid  plan  that  you  suggested? 

Mr.  Dawson:  In  Norway  they  always  required,  after  they  had  passed  a 
Workmen's  Compensation  Act,  the  employer  to  pay  hospital  and  medical  expenses 
during  the  first  thirteen  weeks  that  there  was  no  compensation.  It  was  pretty 
severe,  but  they  were  trying  to  foster  the  building  up  of  sick  societies,  but  they 
did  require  the  employer  to  pay  the  medical  expenses  directly. 

Mr.  Kingston  :  Take  a  case  where  compensation  practically  begins  after  the 
accident.  Is  there  any  law  which  provides  for  medical  and  hospital  expenses  in 
addition  to  the  schedule  of  compensation? 

Mr.  Dawson  :  I  think  most  of  the  continental  laws  do.  That  is  a  mere  re- 
collection.   I  could  look  it  up  very  easily. 

Mr.  Kingston:  That  would  add  quite  a  substantial  item  to  the  compen- 
sation? 

Mr.  Dawson  :  It  does,  no  doubt,  but  that  is  the  general  rule  on  the  continent. 

Mr.  Kingston:  Is  it  not  true  that  a  lump  sum  settlement  is  not  inconsistent 
with  any  current  cost  system? 

Mr.  Dawson:  I  should  think  the  lump  sum  settlement  is  a  thing  not  to  be 
indulged  in  except  in  very  rare  cases,  and  those  very  distinctly  set  out  in  the  Act 
itself,  because  if  a  large  measure  of  discretion  were  given  to  a  Board  in  that  re- 
spect in  my  judgment  the  pressure  upon  them  would  be  the  greatest  torment  of 
their  lives  to  start  with,  and  in  the  next  place  all  those  lump  sum  settlements 
would  mean  that  this  theory  of  current  cost  with  its  gradually  increasing  burden 
would  be  to  that  extent  disturbed  and  destroyed. 

Mr.  Wegenast  :  What  about  leaving  that  feature  out  of  the  Act  in  the  initial 
stages  altogether? 

Mr.  Dawson  :  I  would  like  to  compare  carefully  the  different  Acts  and  give 
some  consideration  as  to  whether  there  are  some  special  cases  where  it  should  be 
provided  before  answering.  I  have  named  one.  I  think  you  ought  to  offer  the 
reward  of  three  or  two  or  one  year's  benefit  to  a  widow  upon  re-marriage. 

The  Commissioner:  That  is  hard  on  the  children. 

Mr.  Dawson:  It  might  greatly  advantage  the  children,  and  probably  does  in 
a  great  many  cases. 

.Mr.  Miller:  There  is  a  danger  that  the  fund  may  be  squandered  if  you  give 
a  lump  sum  by  their  going  into  some  business. 

Mr.  Dawson  :  In  reference  to  being  a  disadvantage  to  the  children,  your  Lord- 
ship, you  should  remember  the  children  get  their  benefits  until  they  are  16  years 
of  age.    It  only  stops  the  widow's  benefit. 

The  Commissioner:  There  is  one  thing  I  wanted  to  ask  with  reference  to 
that  suggestion  that  a  period  might  be  fixed  during  which  the  employee  would  be 
insured  against  all  sickness  and  accident,  whether  occupational  or  otherwise,  as 
to  what  would  happen  if  the  man  was  out  of  employment? 

Mr.  Dawson:  In  that  case  the  employee  would  be  required  to  pay  it  all  if  he 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  467 

wished  to  maintain  it,  and  it  would  be  voluntary  on  his  part.    If  he  did  not  keep 
up  his  payments  he  would  not  be  insured,  and  if  he  kept  them  up  he  would  be. 

Mi;.   Wickxast:  It  would  be  an  inducement  to  go  to  work? 

Me    Dawson:     And  particularly  an   inducement  to   pay  his   insurance. 

Mr.  Doggett:  Supposing  a  man  had  been  paying  for  twenty  years  and  then 
gets  out  of  work? 

Mr.  Dawson  :  He  has  only  paid  for  what  time  he  has  already  been  insured, 
and  he  is  not  entitled  to  more  unless  he  pays  on,  and  certainly  he  cannot  expect 
the  employer  to  pay  it  when  he  is  not  in  his  employment.  That  is  an  argument  in 
favor  of  unemployment  insurance,  but  not  an  argument  against  this. 

Mr.  Bancroft:  Hasn't  that  argument  been  used  as  an  argument  in  favour  of 
insurance  against  unemployment? 

Mr.  Dawson  :  Yes.  The  only  question  about  that  is  its  practicability.  It  is 
generally  regarded  as  desirable  if  it  is  practicable. 

The  Commissioner:  It  is  getting  very  late,  and,  although  I  would  like  to 
hear  Mr.  Ellis  now,  I  think  we  had  better  adjourn.  I  will  arrange  a  meeting 
to  suit  Mr.  Ellis'  convenience,  when  we  will  be  very  glad  to  hear  what  he  has  to  say. 

I  am  sure  we  are  very  much  obliged  to  Mr.  Dawson.  He  has  given  us  a  great 
deal  of  information,  and  I  think  we  all  feel  he  has  endeavoured  to  tell  us  what  he 
thinks  is  the  best,  regardless  of  employer  or  employee.  I  shall  be  glad  if  he  will 
furnish  us  as  soon  as  possible  with  the  information  he  has  kindly  promised  to  send. 

Mr.  Dawson  :  I  shall  do  so,  your  Lordship.  It  has  been  a  great  pleasure  for 
me  to  appear  before  you,  and  if  I  have  been  of  any  service,  however  small,  I  am 
exceedingly  gratified. 

Mr.  Bancroft  :  If  it  is  not  out  of  place  to  say  it,  I  would  like  to  say  that  we 
have  looked  forward  to  Mr.  Dawson's  coming,  and  he  has  not  disappointed  us. 

Mr.  Gibbons  :  I  think  we  ought  to  give  the  Canadian  manufacturers  credit 
for  bringing  Mr.  Dawson  here  as  their  witness.  I  think  they  have  shown  an  im- 
partial spirit,  and  we  as  labour  men,  are  very  well  satisfied  with  the  information  we 
have  got. 

The  Commissioner  :  The  figures  I  gave  some  little  while  ago  I  am  told  refer 
to  Toronto  and  not  to  the  whole  Province. 

Mr.  Dawson:  That  is  the  175,000? 

The  Commissioner:  Yes,  that  only  referred  to  Toronto. 

Mr.  Dawson:  If  you  could  give  me  the  total  number  of  employees  for  the 
whole  Province  it  would  be  better.  I  judge  you  would  like  to  get  an  idea  of  how 
much  expense  it  would  involve  the  Province  for  administration? 

The  Commissioner  :  Yes. 


468  LIST  OF  WITNESSES:  No.  65 


Alphabetical  List  of  Witnesses. 


Mr.  Archer London,  Ont 272 

Mr.  Fred.  Bancroft Vice=Pres.,  Trades  and  Labour  Cong,  Canada 168  et  passim 

Mr.  James  A.  Bastle President,  Trades  and  Labour  Council,  London,  Ont. . .    266=276 

Mr.  Botley Miner,  Cobalt,  Ont 176=196 

Mr.  J.  H.Boyd Counsellor=at=Law,  Toledo,  0 309=383 

Mr.  Bruce Amal.  Asso.  Plumbers,  Steam  and  Gas  Fitters 206=252 

307=355,  447,  461 
Mr.  J.  T.  Burke Chief  Factory  Inspector,  Toronto 366 

Mr.  Cohen Mines  Manager,  Cobalt,  Ont 178,196 

Mr.  E.  T.  Corkill Inspector  of  Mines,  Ont 166 

Mr.  Miles  M.Dawson Counsellor=at=Law,  New  York,  N.Y 392=467 

Mr.  Dempster Toronto,  Ont 218=221 

Mr.  Dillon Toronto,  Ont 210=222 

Mr.  Doggett Amalgamated  Society  Carpenters  and  Joiners 170,  171 

204=217,  252=260,  309=329 

Mr.  P.  W.  Ellis P.  W.  Ellis  &  Co.,  Toronto,  Ont 452,  461 

Mr.  J.  Firstbrook President,  Firstbrook  Box  Co.,  Toronto,  Ont 164 

Mr.  Atwell  Fleming Fleming  Printing  Co.,  Toronto,  Ont 299=307 

Mr.  George  Gander President,  Builders'  Exchange,  Toronto,  Ont 169 

Mr.  W.  A.  Gartshore.... Manager,  McClary  Manufacturing  Co.,  London,  Ont.    269=276 

Mr.  Gauthier Miner,  Cobalt,  Ont 178,  191 

Mr.  James  Gibbons Toronto  Street  Railway  Union 150=169 

206=223,  356=390,  422,  423,  440,  465 

Mr.  Gorman Cobalt,  Ont 193,  195 

Mr.  Charles  Gould London,  Ont 263=273 

Mr.  S.  R.  Gourlay Vice=President,  Canadian  Manufacturers  Association  163 

Mr.  Sam.  Harris Harris  Lithographing  Co.,  Toronto,  Ont...      258,  304,  326=331 

Mr.  E.  C.  Hunt Toronto,  Ont 134,  135,  148 

Mr.  John  Jones Builders'  Exchange,  Toronto,  Ont 260,  261,  276 

Prof.  D.  R.  Keys University  of  Toronto 252=260 

Mr.  G.  A.  Kingston Union  Trust  Co.,  Toronto,  Ont 229=258,  418,  434=466 

Mr.  Kingswell Cobalt,  Ont 185=195 


1912  WORKMEN**  COMPENSATION  COMMISSION.  469 


LIST    OF    WITNESSES— Continued. 


Mr.  C.  Lawrence Locomotive  Engineer 151,  153 

Mr.  Lothian Cobalt,  Ont 193,  194 

Mr.  A.  Claude  Macdonell,  K.C.,  M.P.,  Toronto,  Ont 135=139 

Mr.  Angus  MacMurchy,  K.C.,  Toronto,  Ont 449 

Mr.  D.  L.  McCarthy,  K.C.,  Toronto,  Ont 138 

W 

Mr.  J.  P.  Maguire Cobalt,  Ont 187=195 

Mr.  J.  W.  Mahon Timiskaming  Mines  Managers'  Association  179=194 

Mr.  Marks Editor,  "  Industrial  Banner" 267=269 

Mr.  Martin London,  Ont 261=273 

Mr.  Meredith Railway  Trainmen's  Union 142=154,  204=218,  244=258 

Mr.  J.  Q.  Merrick Employers'  Association 164,  362=369 

Mr.  Andrew  Miller Carpenters'  Union....     148,  205=224,  303,  440=447,  460,  466 

Mr.  Q.  M.  Murray Secretary,  Canadian  Manufacturers'  Association 159=162 

Mr.  C.  H.  Neely General  Manager,  Ocean  A.  &  G.  Insurance  Co 230=250 

Mr.  Nutkins London,  Ont 261=272 

Mr.  O'Connell Mines  Manager,  Cobalt,  Ont 184=192 

Mr.  J.  Ransford Manufacturer,  Clinton,  Ont 309,  310,  328 

Mr.  Reesor London,  Ont 271=276 

Mr.  Sangster Toronto,  Ont 359 

Mr.  Simpson London,  Ont 266 

Mr.  James  Simpson Typographical  Union 305,  306,  357=360 

Mr.  A.  Smith Cobalt,  Ont 189 

Mr.  W.  T.  Stewart Toronto,  Ont 137=139 

Mr.  Stratfold London,  Ont 262,  263 

Mr.  N.  Taber Toilet  Laundry  Co 149,  150 

Mr.  W.  B.  Tindall Parry  Sound  Lumber  Co 369 

Mr.  Gordon  Waldron Barrister,  Toronto,  Ont 226=259 

Mr.  Ware Miners'  Union,  Porcupine,  Ont 172,  176,  189=192 

Mr.  G.  W.  Watts Canada  Gen.  Electric  Co 330,  353=360 

Air.  F.  W.  Wegenast Solicitor,  Canadian  Alanufacturers'  Assoc 139  et  passim 

Mr.  J.  Wha'en Cobalt,  Ont 192,  194,  195 


i:  •  SYNOPSIS  OF  ME.  J.  H.  BOYD'S  BRIEF:  No.  65 

A   SHORT    SYNOPSIS    OF 

THE    BRIEF    OF    MR.    JAMES    HARRINGTON    BOYD, 

OF  TOLEDO,  OHIO,  COUNSELLOR=AT=LAW. 


The  brief  contains  an  argument  in  favour  of  the  view  that  the  legislature 
of  the  State  of  Ohio  (or  any  of  the  States  of  the  United  States)  has  power  to 
substitute  without  the  consent  of  the  employer  or  his  employees,  industrial  insur- 
ance, as  made  and  provided  in  the  Workmen's  Compensation  Act — an  act  "To 
create  a  state  insurance  fund  for  the  benefit  of  injured,  and  the  dependants  of 
killed  employees,  and  to  provide  for  the  administration  of  such  fund  by  a  State 
Liability  Board  of  Awards."  The  act  is  an  adaptation  of  the  German  Industrial 
Insurance  Law,  a  plan  of  insurance  between  employer,  employees  and  the  State, 
authorized  by  law  to  insure  workmen  and  their  dependants  against  the  loss  of 
wages  arising  out  of  industrial  accidents.  The  Ohio  law  is  in  fact  a  contract 
between  these  parties  in  the  nature  of  an  insurance  policy. 

An  analysis  is  made  of  what  is  believed  t^  be  the  true  theory  of  industrial 
insurance,  namely,  that  under  all  circumstances  it  is  in  fact  a  tax  levied  by  the 
state,  both  upon  the  employer  and  employee,  and  accepted  by  the  employee  class 
for  the  public  welfare.  This  is  necessarily  so,  for  were  the  new  obligation  of 
the  employer  deemed  to  be  created  with  the  sole  object  of  establishing  in  the 
employee  a  new  private  right  and  remedy  in  substitution  of  his  former  right  to 
sue  in  tort  for  damages,  then  an  industrial  insurance  law  would  be  as  unfair  to  the 
employee  as  to  the  employer.  This  proposition  is  true,  because  in  lieu  of  a  possible 
opportunity  formerly  belonging  to  the  injured  employee  to  be  made  whole  in  a  sum 
for  damages  fully  commensurate  with  his  peculiar  loss,  he  would  be  compelled 
under  an  industrial  insurance  act  to  accept  a  stipulated  amount  admittedly  having 
no  relation  to  his  injury,  but  measured  on  the  basis  of  his  relative  economic 
position  in  the  community,  viz. : — the  amount  of  his  wage.  This  is  not  a  just 
basis  to  compensate  the  employee  for  his  injury,  if  his  new  right  is  to  be  classified 
in  the  same  category  in  which  his  old  right  belongs,  viz. :  a  means  to  redress  a 
private  wTong. 

The  law  should  require  the  employee  to  accept,  in  lieu  of  his  former  pre- 
carious right  to  adequate  damages,  a  stipulated  sum  computed  not  independently 
as  to  each  party  injured  on  the  basis  of  loss  peculiar  to  his  own  personal  injury, 
but  relatively  as  to  all  in  accordance  with  their  respective  earning  capacities.  Its 
sole  justification  is  the  public  welfare,  and  whatever  its  form  it  must  be  in  effect 
an  arbitrary  levying  and  administration  of  a  tax  fund. 

On  this  theory,  it  is  argued,  the  position  of  employer  and  employee  are 
altered,  that  no  new  statutory  privity  of  relationship  is  created,  but  that  each  is 
required  to  perform  a  new  duty  toward  the  Slate  the  employer  to  pay  an  adequate 
tax,  and  the  employee  to  surrender  a  chose  in  action:  each  for  the  public  welfare, 
ami  hi  exchange  for  specific  benefits,  to  surrender  la  the  State  certain  rights  and 
to   look  to  a  State  agency  alone  fur  reciprocal  benefits. 


1912  WORKMEN'S  COMPENSATION  COMMISSION.  471 

-  . _ — , 

Brief  Historical  Review  of  the  German  Plan  of  Insurance  of  Workman 

against  Accidents,  of  the  English  Compensation  Act,  of  the 

Operation  of  Employers'  Liability  in  England  and 

!\  the  United  States.,  and  their  Economical 

Results. 


Frederick  the  Great  claimed  to  be  the  king  of  the  poor,  and  to  have  the 
right  to  use  the  state  for  their  protection  and  uplifting.  The  Prussian  law  of  a 
century  ago  stated: 

"It  is  the  duty  of  the  state  to  provide  sustenance  and  support  for  those  of 
its  citizens  who  cannot  provide  for  themselves.  Work  adapted  to  their  strength 
and  capacities  shall  be  supplied  to  those  who  lack  means  and  opportunities  of 
earning   a    livelihood   for   themselves   and    those   dependent   upon   them. 

'"Those  who  from  laziness,  love  of  idleness,  or  other  irregular  proclivities,  do 
not  choose  to  employ  the  means  offered  them  of  earning  a  livelihood,  shall  be 
kept  to  useful  work  by  compulsion  and  punishment  under  proper  control. 

"The  State  is  entitled  and  is  bound  to  take  such  measures  as  will  prevent 
the  destitution  of  its  citizens  and  check  excessive  extravagance. 

"The  police  authorities  of  every  place  must  provide  for  all  poor  and  destitute 
persons  whose  subsistence  cannot  be  insured  in  any  other  way.1 

In  England  prior  to  1837  the  principles  of  the  common  law  of  negligence  or 
fault  formed  the  only  basis  of  recovery  by  a  workman  from  his  employer,  on 
account  of  accident. 

In  that  year  Priestly  v.  Fowler,  3  M.  and  W.  1,  established  the  fellow-servant 
rule,  that  the  master  is  not  bound  to  respond  in  damages  for  an  injury  to  his 
servant  in  the  course  of  his  employment  the  cause  of  which  was  due  to  the 
negligence  of  a  fellow-servant. 

Prussia  in  1838  initiated  the  principle  of  the  liability  of  railway  companies  to 
provide  compensation  for  industrial  accidents.  The  companies  had  only  the  de- 
fences of  the  negligence  of  the  person  injured,  or  the  "act  of  God." 

In  1842  Shaw,  J.  of  Massachusetts,  in  Farwell  v.  B.  &  W.  E.  R.  Co.  4  Metcalf 
49,  laid  down  the  doctrine  of  assumed  risks. 

In  1854  statutes  were  passed  in  Germany  compelling  certain  classes  of  em- 
ployers to  contribute  one-half  of  the  subscriptions  to  the  sickness  association  fund, 
formed  according  to  local  statutes. 

The  obligation  was  imposed  upon  independent  mechanics  and  manufacturers 
to  advance  the  contributions  of  their  journeymen  and  assistants,  with  the  proviso 
for  charging  it  to  the  next  payment  of  wages.  As  compensation  for  his  share 
in  the  payment,  the  employer  is  assured  a  proportionate  influence  in  the  admin- 
istration of  the  fund. 

Brunswick,  Mecklenburg  and  Saxony,  went  even  further  than  Prussia  in 
requiring  all  employers  to  belong  to  some  kind  of  mutual  association.2 

The  act  of  18'69,  for  the  North  German  Confederacy  had  the  effect  of  releasing 
the  bond  of  compulsory  contributions  to  the  sickness  fund  by  employers  provided 
by  the  act  of  1854. 

In  1876  there  were  in  all  Prussia  5,239  compulsory  societies,  with   869,304 

1  Fourth  Special  Report  of  the  Commissioner  of  Labour  of  the  United  States,  p.  2$. 

2  Fourth  Special  Report  of  the  Commissioner  of  Labour  of  Ignited  States,  1893,  p.  35. 


472  SYNOPSIS  OF  MR.  J.  H.  BOYD'S  BRIEF:  No.  65 


members.  In  1880  Prussian  official  statistics  showed  830,602  members  of  regis- 
tered friendly  societies,  220,000  of  miners'  societies,  and  200,000  of  non-registered 
friendly  societies;  in  all,  1,250,702  out  of  2,400,000  employed  in  mines  and  in- 
dustries within  the  law.  So  little  effective  was  the  act  that  half  of  those  for 
whom  the  societies  (sickness,  relief,  and  burial)  were  meant  were  still  uninsured. 

In  England  the  first  employers'  liability  act  was  passed  in  1880.  Its  most 
important  provision  was  the  extension  of  the  doctrine  of  vice-principal,  but  the 
relief  appears  to  have  been  slight  and  unsatisfactory.  The  unimpaired  rigour 
of  the  rule  as  to  assumption  of  risk  became  more  evident  as  the  use  of  safety 
appliances  became  more  general  and  the  number  of  accidents  traceable  to  the 
employer's  negligence  fewer.  After  an  unsuccessful  attempt  by  Mr.  Asquith,  in 
1893,  to  do  away  with  the  common  employment  rule  and  the  implied  contract  of 
assumption  of  risk,  the  time  was  ripe  for  the  introduction,  in  1897,  of  Mr. 
Chamberlain's  Workmen's  Compensation  Act,  the  gist  of  which  is  to  provide  un- 
failing compensation  for  injured  workmen,  without  regard  to  negligence. 

The   efficiency   of  the   British   compensation   act   as   compared   with   the   em- 
ployers' liability  act  is  conclusively  shown  by  statistics.    In  1904  there  were  3,065 
deaths   of   employees   in   industrial   accidents   covered   by   the    compensation    act, 
524  claims  came  before  the  county  courts,  and  112  were  brought  under  the  em- 
ployers' liability  act. 

In  Germany  after  investigation  by  the  police,  the  compensation  is  fixed 
officially,  and  without  delay,  by  the  organs  of  the  trade  associations. 

From  the  decision  of  the  trade  association  the  applicant  may.  within  a  month 
appeal  to  an  arbitration  court  composed  of  two  representatives  chosen  by  the 
employer,  two  by  the  employees,  and  a  state  official  as  chairman.  Arbitration 
courts  for  both  accidents  and  invalidity  insurance  have  been  in  operation  since 
1901.* 

As  the  trade  associations  have  a  strong  interest  in  diminishing  the  number 
of  accidents,  the  law  confers  on  them  the  important  privilege  of  making  regula- 
tions for  the  prevention  of  accidents,  compelling  employers,  under  penalty  of 
higher  assessments,  to  adopt  measures  necessary  for  safety,  and  by  fines  forcing 
observance  of  these  measures  upon  the  workman. 

Statistics  for  the  last  twenty-five  years,  particularly  German  and  American 
statistics,  show  that  from  50  to  55  per  cent,  of  accidents  to  workmen,  injured 
or  killed  in  the  course  of  their  employment,  are  due  to  the  natural  hazard  of  the 
business,  i.e..  to  the  inevitable  risk  of  the  business  plus  the  combined  negligence 
of  the  employer  and  employee;  that  from  18  to  20  per  cent  are  due  to  the  neg- 
ligence of  the  employer;  and  25  to  30  per  cent,  to  the  negligence  of  the  workman. 
The  common  law  action,  based  upon  fault  of  the  employer,  furnishes  compen- 
sation in  less  than  20  per  cent,  of  the  cases;  in  less  than  12  per  cent,  in  the  State  of 
New  york,  in  8  per  cent,  in  Illinois,  and  in  6  per  cent,  in  each  of  the  States  of  Ohio 
and  Pennsylvania.  Even  if  all  the  common  law  defences  were  abrogated,  an 
average  of  only  12l^>  per  cent,  of  workmen  in  industrial  employments  ivould  re- 
cover any  compensation.  From  social  and  economic  points  of  view,  the  common 
law  action,  based  upon  fault  of  the  employer,  is  a  failure^  and  is  being  abandoned 
in   Washington,   Ohio,  Wisconsin,  Massachusetts  and  Montana. 

*  Dr.  George  Zacher,  Guide,  etc.,  p.  13. 

1  Report  of  Employers'  Liability  Commission  of  Ohio,  Pt.  1,  pp.  25  to  75.     Annals  of 
the  American  Academy  of  Political  and  Social  Science,  July,  1911. 


1912 


WORKMEN'S  COMPENSATION  COMMISSION. 


173 


Statistics  of   Compulsory   State  Insurance  in  Germany. 

In  1887  there  were  insured  against  sickness  and  accidents  in  Germany 
3,8G1,560  workmen  among  319,453  establishments.1  The  number  of  notices  of 
accidents  was  106,101. 

In  1907,  insured  in  Germany  against  accidents:2  Persons 

Industrial,  building,   and  marine  trade   associations    (associations,   66; 

establishments,  637,118)   9,018,367 

Agriculture  and  forestry  trade  associations  (associations,  48;  establish- 
ments, 4,710,401)    11,189  071 

State  executive  boards  (boards,  535 )    964,589 

21,172,027 

In   1S97,   there   were   insured   in  .Germany   against   accidents   in   the  same 

associations,  and  409  State  executive  boards,  in  round  numbers3 18,500,000 

Table  No.  X.— Industrial  Accident  Statistics,  1887  to  1897,3  and  18974  to  1907 

Under  the  German  Law. 


1887 

1897 

1907 

(46,000 

accidents). 

By  fault  of — 

Emplover 

Per  cent. 
20.47 
26.56 

8.01 

Per  cent. 
17.30 
29.74 
11.14 

Per  cent. 
16.81 

Employees 

28.89 

Both  parties 

9.94 

Due  to  inevitable  risks  of  the  industries  and  other 

55.04 
44.96 

57.18 
42.82 

55.64 
44.36 

100.00 

100.00 

100.00 

Summarized : 


Inevitable  risks 

8.01 
44.96 

10.14 
42.82 

9.94 
44.36 

Natural  hazard 

52.97 

52.96 

54.30 

Average,  53.41  per  cent. 

This  table,  covering  a  period  of  20  years,  shows  the  elements  of  fault  which 
enter  into  the  problem,  and  supplies  a  valuable  basis  for  improvement  in  pre- 
ventive measures,  since  from  55  to  57  per  cent,  of  all  accidents  are  due  either  to 
the  fault  of  the  employer,  of  the  employee,  or  of  the  two  combined. 

In  the  opinion  of  the  writer,  the  scientific  and  economic  value  of  the  statistics 
in  Table  X  are  of  the  greatest  importance;  the  conclusions  are  new  discoveries 
in  the  field  of  political  economy. 


'Fourth  Special  Report  of  the  Commissioner  of  Labor,  1893,  p.  83. 

2  Workingmen's  insurance  in  Europe,  Frankel  and  Dawson,  1910,  p.  101. 

3  Dr.  George  Zacher,  Introduction  to  Workmen's  Insurance  in  Germany. 

4  Bulletin  of  Bureau  of  Labor,  1908,  p.  120. 


474  SYNOPSIS  OF  ME.  J.  H.  BOYD'S  BRIEF:  No.  65 


The  statistics  of  Minnesota  and  of  Wisconsin  show  that  40  to  50  per  cent, 
of  all  industrial  accidents  are  due  to  the  inevitable  risks  of  the  business;  Austrian 
tables  show  70  per  cent.5 

During  the  decade  1887-1897  there  came  under  the  German  law  12,500,000 
workmen,  in  agriculture,  forestry,  and  the  building  trades.6  These  workmen  were 
the  most  ignorant  and  the  most  poorly  trained  of  all  workmen  insured  under  the 
law.  The  percentage  of  accidents  attributable  to  the  negligence  of  the  workman 
increased  from  25.56  per  cent,  in  1887  to  29.74  per  cent,  in  1897,  an  increase  of 
almost  3  per  cent.  During  the  period  1897-1907  this  element  of  fault  fell  from  29.74 
per  cent,  to  28.39  per  cent.,  while  the  number  of  such  workmen  remained  prac- 
tically unchanged.  The  decline  is  due  to  accident  prevention,  which  has  been  so 
carefully  studied  in  Germany,  and  to  the  greater  intelligence  of  workmen.  The 
percentage  of  accidents  attributable  to  the  employer  was  in  1887  20.47  per  cent.; 
in  1897,  17.30  per  cent.;  and  in  1907,  16.81  per  cent.  The  percentage  of  accidents 
due  to  natural  hazard  remains  practically  constant  at  53.41  per  cent. 

In  52  per  cent,  of  all  cases  of  injury,  and  in  81.80  per  cent,  of  cases  due  to 
natural  hazard  and  the  fault  of  the  workman,  there  is  at  common  law  no  relief, — 
none  for  the  workman,  none  for  the  dependants.  To  provide  relief  for  the  injured 
workman,  and  for  his  family  and  dependants,  is  the  immediate  purpose  of  industrial 
insurance  laws.  Whether  the  injury  be  attributable  to  the  negligence  of  the 
employer,  or  of  the  employee,  or  to  the  natural  hazard  of  the  business,  the  effect 
on  family  and  dependants  is  the  same,  and  where  common  law  remedies  fail 
equitable  remedies  must  be  sought. 

At  common  law  in  Great  Britain  and  the  United  States,  a  workman  can 
recover  damages  for  injuries  due  to  the  negligence  of  the  employer,  when  the 
workman's  own  acts  have  not  contributed  to  the  accident. 

The  plaintiff  can  not  recover  if  the  defendant  proves — 

(a)  That  the  plaintiff's  negligence  contributed  to  the  cause  of  the  accident;  or 

(b)  That  the  negligence  of  a  fellow-servant  was  the  cause  of  the  accident;  or 

(c)  That  the  plaintiff  assumed  the  risk. 

In  the  years  1906,  1907,  and  1908,  ten  employers'  liability  insurance  com- 
panies doing  business  in  the  State  of  New  York: — 

Received  in  premiums  from  employers  $23,524,000 

Paid  to  injured  employees  8,560,000 

Waste     :  $14,964,000 

For  every  $100  paid  out  by  employers  for  protection  against  liability  to  their 
injured  workmen,  less  than  $37  gets  to  those  workmen;  $63  goes  in  salaries  to 
attorneys  and  to  agents  whose  business  it  is  to  defeat  claims,  to  the  cost  of  soliciting 
business,  to  the  expenses  of  administration,  in  court  fees,  and  to  profits.  The 
injured  workman  pays  his  attorney  26.13  per  cent,  of  the  amount  received.  This 
investigation  covers  46  cases,  in  each  of  which  the  recovery  was  $1,500  and  over. 
In  smaller  recoveries  attorneys'  fees  take  a  larger  proportion.  Actually,  no1  more 
than  20  to  25  per  rent,  of  the  money  paid  by  the  employer  reaches  the  injured  work- 
man or  his  dependants. 
— ^ 

5  Report  of  the  New  York  Commission,  p.  25. 

*  Frankel  &  Dawson's  Workingmen's  Insurance  in  Europe,  p.  101. 

7  First  Report  of  the  Employers'  Liability  Commission  of  New  York,  p.  31. 


1912 


WORKMEN'S  COMPENSATION  COMMISSION. 


475 


GERMANY -.—Causes 

of  Accidents  in 

1887. 

Attributable  Causes. 

Per  cent. 

Number. 

Fault  of  the  employer  : 

10.64 
7.03 
2.09 

1,700 

Defective  arrangement  for  carrying  on  business 

1,122 

Lack  of  directions  or  improper  ones 

334 

Totals 

19.76 

3  156 

Fault  of  injured  : 

Awkwardness  or  inattention 

16.49 
5.17 
1.98 
1.76 

.24 

2,634 
825 

Heedlessness  

316 

Failure  to  make  use  of  protective  apparatus 

281 

Unsuitable  clothing 

38 

Totals 

25.64 

4,094 

Fault  of  the  employed  and  injured 

4.45 

3.28 

3.47 

43.40 

711 

Fault  of  third  person,  particularly  a  co-labourer 

524 

No  fault  which  can  be  assigned 

554 

Inevitable  risk  when  at  work , 

6,931 

Totals 

54.60 

8,720 

Of  these  15,970  accidents,  in  3,156,  less  than  20  per  cent.,  would  the  injured 
workman  he  entitled  to  receive  damages,  damages  of  such  uncertain  amount  as  a 
jury  might  award.  In  12,814,  over  80  per  cent.,  neither  the  workman,  his  family, 
nor  dependants  would  be  entitled  to  recover  anything. 

Prior  to  compulsory  state  insurance  in  Germany,  workmen  at  common  law 
and  under  liability  laws  received  compensation  in  10  per  cent,  only  of  accident 


cases 


29 


Results  of 

Accidents 

in 

1887. 

Results. 

Per  cent. 

Number. 

Death  

18.52 

17.70 
50.88 

2,956 

Permanent  incapacity  : 

Entire  

2,827 

Partial , 

8,126 

Totals 

68.58 
12.90 

10,953 

Incapacity  for  a  time  longer  than  13  weeks 

2,061 

The  bulletin  of  the  United  States  Bureau  of  Labour,  January,  1908,  p.  120, 
gives  statistics,  collected  by  the  German  Imperial  Insurance  Office,  of  46,000  in- 
dustrial accidents. 

The  classification  of  the  causes  of  these  accidents  is  as  fellows: 

Due  to —  Per  cent. 

1.  Negligence   or   fault   of   employer    .  . ; 16.81 

2.  Joint  negligence  of  employer  and  employee  1.66 

3.  Negligence  of  co-employees    (fellow-servants)    5.28 

4.  "  Act   of   God  "    2.31 

5.  Fault  or  negligence  of  employee    28.89 

6.  Inevitable  accidents  connected   with  the   employment    42.05 

Total 100.00 

29  Fourth  Special  Report  of  Commissioner  Wright,  in  1893. 


476  SYNOPSIS  OF  ME.  J.  H.  BOYD'S  BBIEF :  Xo.  65 

_ \ 

These  figures  grouped  to  correspond  to  those  for  one  year,  1887,  are: 

Due  to —  Per  cent. 

1.  Employer     16.81 

2.  Employees 28.89 

3.  The  inherent  risks  of  the  business   54.30 

Total 100.00 

Under  the   German  insurance  plan,   there   was  paid   out  during  the  twenty 
3'ears  ending  in  1904: — 

On  account  of — 

Sickness    $555,750,000 

Accidents    232,750,000 

Invalidity  and  Old  Age  13,500,000 

Total     $802,000,000 

Of  this  sum  contributions  were : — 

From — 

Employers    $424,500,000 

Workmen    377,000,000 

$801,580,000 

The  Imperial  Government  defrayed  the  cost  of  administration,  and  to  the 
invalidity  and  old  age  fund  contributed  fifty  marks  ($12.50)  in  each  case  insured. 

Employers.  Workmen, 

per  cent.  per  cent. 

To  sickness   insurance    33  67 

To   accident   insurance    85  15 

To  invalidity  and  old-age  insurance   50  50 

Population    in    1907    62,000,000 

Workmen    insured    27,172,000 

Under  the  British  system  the  number  of  workmen  insured  in  1908  was  13,000,000. 

Compensation  for  death : 

(a)  A  sum  equal  to  three  years'  earnings,  but  not  less  than  £150  ($730) 
nor  more  than  £30,0    ($1,460). 

(h)   A  sum  less  than  above  amount  to  partial  dependants. 

(c)  Medical  and  funeral  expenses,  not  to  exceed  £10  ($49),  if  no  de- 
pendants. 

Compensation  for  disability: 

A  weekly  payment  during  disability  of  not  more  than  50  per  cent,  of  the 
workman's  average  weekly  earnings,  but  not  exceeding  £1  ($4.87)  a 
week;  if  the  incapacity  lasts  loss  than  two  weeks,  no  compensation  is 
allowed  the  first  week. 

Liability  for  payment  of  compensation  is  on  the  employer,  and  he  is  not 
obliged  to  insure.  From  both  the  German  and  English  systems  have  been  elimin- 
ated the  three  common  law  doctrines — contributory  negligence,  assumption  of 
risk,  fellow-servant — and  only  in  the  case  of  proved  malicious  negligence  ("serious 
and  wilful  misconduct")   is  compensation  disallowed. 


ISIS  WORKMEN'S  COMPENSATION  COMMISSION.  \\] 

— j 

Statistics  show  that  in  the  United  States  social  and  economic  conditions  are 
gravely  threatened  by  the  industrial  insecurity  of  the  workman  under  the  common 
law  and  liability  acts.  Compulsory  State  insurance  seeks  to  conserve  the  workman's 
normal  capacity  and  to  bring  it  to  the  highest  efficiency. 

Industrial  accidents  in  the  United  States  are  due  to: 

Inherent   risks   of   business    50       per  cent. 

Negligence  of  employer   20       per  cent. 

Negligence    of    workman    12  %  per  cent. 

In  1909,  the  killed  and  injured  workmen  in  the  United  States  numbered 
536,000.     At  common  law  for  80  per  cent,  there  would  be  no  ielief. 

Ohio  recognizes  the  State's  duty  to  provide  for  its  injured  and  helpless  work- 
men and  their  families.  Whether  this  can  be  better  done  under  the  older  laws  or 
under  the  present  act  the  following  comparative  statement  will  show: 

1.  (a)   Under  the   older   laws,   the   average   payment   for   death   is   $344.88 
(&)   Under  the  act,  an  average  of  $2,200. 

2.  (a)   Older  laws,  average  cost  of  collection,  24  per  cent. 
(b)   New  act,  no  deductions. 

3.  (a)   36  per  cent,  receive  something;  64  per  cent,  nothing. 
(b)   80  to  95  per  cent,  receive  compensation. 

4.  (a)   Of  the  36  per  cent,  who  get  something,  60  per  cent,  get  from  $50  to 

$500,  and  12  per  cent,  get  more  than  50  per  cent,  of  the  actual  amount 
paid. 
(b)   The  average  of  $2,200  is  paid  without  deductions. 

5.  (a)   There  is  delay  in  payment,  from  one  to   five  years,  with   resultant 

hardships  for  the  family. 
(&)   No  delay.     As  a  rule  the  compensation  is  not  paid  in  a  lump  sum, 
but,  in  general,  as  the  wages  had  been  paid. 

6.  (a)   56  per  cent,  of  the  widows,  and   18  per  cent,  of  the  children,  are 

forced  to  work. 
(b)   The  percentages  will  be  reduced,  probably  to  10  and  4  respectively. 

The  act  provides  in  case  of  death  for  minimum  and  maximum  payments  of 
$1,500  and  $3,400,  with  $150  allowance  for  medical  and  funeral  expenses. 

Where  the  injury  results  in  total  disability  payment  is  made  of  60  per  cent, 
of  wages  for  not  more  than  300  weeks.  For  partial  disability,  60  per  cent,  of 
impaired  earning  capacity  during  the  continuance  of  the  disability,  or  from  $5  to 
$12  a  week. 

An  employer  who  elects  not  to  come  under  the  act  forfeits  his  right  to  the 
usual  common  law  defences.  The  workman  of  an  employer  within  the  act  is  him- 
self within  the  act,  but  in  the  event  of  being  denied  all  right  to  compensation,  or 
where  his  injury  is  due  to  the  wilful  negligence  of  the  employer,  or  to  the  em- 
ployer's violation  of  a  statutory  duty,  the  workman  is  not  precluded  from  other 
legal  remedies. 

The  employer  contributes  ninety  per  cent,  of  the  premium,  the  worker  ten 
per  cent.  The  cost  to  the  workman  will  probably  be  from  one  to  two  dollars  a 
year.  The  argument  for  making  the  employer  and  the  workman  joint  contributors 
is  that  it  will  create  in  each  a  vital  interest  in  accident  prevention. 

The  Treasurer  of  State  is  the  custodian  of  the  fund,  and  all  disbursements  there- 
from are.  upon  duly  signed  vouchers,  paid  by  him. 


478  SYNOPSIS  OF  MR.  J.  H.  BOYD'S  BRIEF:  No.  65 

The  Ohio  Act  is  an  adaptation  of  the  German  Industrial  Accident  Insurance 
Law  of  1884,  which,  in  more  or  less  modified  form,  has  been  followed  by  all  the 
countries  of  Europe. 

Dr.  Laband,  analysing  the  industrial  insurance  legislation  of  Germany  and 
of  other  European  countries,  says  (Droit  Public  de  l'Imperial  Allemand,  IV.,  12)  : 

"The  Imperial  legislation  starts  from  this  idea — that  the  undertaker  of  an 
enterprise  who  employs  workmen  in  order  to  appropriate  to  himself  the  economic 
value  of  the  fruits  of  their  labour  owes  them  not  only  the  agreed  wages  for  their 
labour,  but  ought  also  to  bear  with  them  the  risks  of  accident  resulting  from 
this  labour.  This  conception  has  not  taken  the  shape  of  a  principle  of  private 
law  which  governs  the  relations  resulting,  in  a  judicial  sense,  from  the  labour 
contract;  it  has  become  the  duty  of  the  State  to  take  care  of  the  victim  of  an  in- 
dustrial accident  and  of  his  dependants;  and  this  duty  is  effected  by  means  of 
public  law.  The  right  of  the  workman  to  the  solicitude  of  the  State  is  wholly  in- 
dependent of  and  unaffected  by  any  contract  between  him  and  his  employer.  The 
right  is  tiot  founded  on,  nor  is  it  affected  by  fault  in  either  employer  or  workman, 
unless  fault  in  either  of  them  has  been  proved  intentional.  The  obligation  to  aid 
the  workman  is  not  a  legal  obligation,  or  what  is  called  a  State  obligation,  of  the 
master  to  his  workman,  for  master  and  workman  are  not  set  against  one  another  as 
debtor  and  creditor,  and  they  are  powerless  to  vary  the  right  of  the  one  to  aids  and 
the  obligation  of  the  other  to  give  them.  The  workman  and  his  dependants  receive 
the  aids  through  an  intermediary  delegated  by  the  State  who  performs  a  purely 
administrative  function,  and  who  has  no  private  legal  relation  with  either  the  work- 
man or  his  dependants  !* 

The  distinction  between  the  principles  applicable  to  the  common  law  of  torts 
and  to  employers'  liability  acts,  and  the  principles  applicable  to  industrial  insurance 
or  workmen's  compensation  may  be  stated  in  the  following  propositions : 

1.  "The  body  of  law  involved  in  the  law  of  torts  and  in  employers'  liability  acts 
results  in  the  payment  to  the  employee  of  damages  intended  to  be  commensurate 
with  the  injury  suffered.  Such  law  has  for  its  sole  object  and  end  the  regulation  of 
private  rights,  that  is,  the  readjustment  of  relationship  between  individuals,  to 
reproduce  the  parity  presumptively  existing  between  them. 

2.  "The  obligations  of  Industrial  Insurance  and  Workmen's  Compensation  Acts 
arise  from  contingencies  not  dependent  upon  nor  within  the  control  of  the  parties; 
have  no  relationship  whatever  to  the  conduct  of  the  parties;  are  not  based  upon 
wrongs.  It  folloivs  then  that  they  must  pertain  to  the  subject  of  government  regu- 
lations, and  are  in  the  nature  of  economic  provisions  in  the  form  of  indirect  taxation 
levied  to  regulate  occupations.  On  what  other  basis  would  the  government  be  justi- 
fied in  writing  an  insurance  policy  into  the  labour  contract?  Were  this  not  so, 
industrial  insurance  and  workmen's  compensation  would  be  free  from  the  stand- 
point of  both,  employee  and  employer,  without  basis  of  justice  or  equity,  for  the 
theory  is  that  compensation  is  not  to  be  commensurate  with  injury,  but 
is  to  be  based  upon  wages,  thus  substituting  for  the  former  obligations  based  upon 
tort,  a  purely  arbitrary  sum.  Such  a  scheme  can  have  no  relation  to  the  adjustment 
of  private  wrongs.  If  justifiable,  it  must  be  on  the  sociologic  and  economic  theory 
of  the  right  of  the  State  to  levy  a  tax  for  the  purpose  of  protecting  the  community 
as  a  whole." 

*  R.  J.  Cary  Brief  on  Industrial  Insurance  Law. 


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FINAL   REPORT 


ON 


Laws  Relating  to  the 
Liability  of  Employers 

To  Make  Compensation  to  their  Employees  for 
Injuries  received  in  the  course  of  their  employment 
which  are  in  force  in  other  countries. 

AND 

SECOND   INTERIM   REPORT 

ON 

Laws  Relating  to  the 
Liability  of  Employers 


WITH  DRAFT  OF 


An  Act  to  provide  for  Compensation  to  Workmen 
for  Injuries  sustained  and  Industrial  Diseases  con- 
tracted in  the  course  of  their  employment. 


BY 

THE   HON.    SIR   WILLIAM    RALPH    MEREDITH,    C.J.O., 

COMMISSIONER. 


PRINTED  BY  ORDER  OF 
THE    LEGISLATIVE    ASSEMBLY    OF    ONTARIO 


TORONTO : 
Printed  and  Published  by  L.  K.  CAMERON,  Printer  to  the  King's  Most  Excellent  Majesty 

19  13 


INDUSTRIAL  ACC1DLNI  BUAtty 

OF  THE 

STATE  OF  CALIFORNIA 

FINAL    REPORT 

ON 

Laws  Relating  to  the 
Liability   of    Employers 

To  Make  Compensation  to  their  Employees 
for  Injuries  received  in  the  course  of  their 
employment  which  are  in  force  in  other 
countries. 

By 
THE  HON.  SIR  WILLIAM  RALPH  MEREDITH,  C.J.O., 

COMMISSIONER. 


PRINTED  BY  ORDER  OF 

THE  LEGISLATIVE  ASSEMBLY  OF  ONTARIO 


TORONTO : 
Printed  and  Published  by  L.   K.  CAMERON,  Printer  to  the  King's   Most  Excellent    Majesty 

19  13. 


Printed  by 

WILLIAM    BRIGGS 

29-37    Richmond    Street    West 

TORONTO 


Final   Report 


ON 

LAWS    RELATING    TO    THE    LIABILITY  OF    EMPLOYERS    TO    MAKE    COMPENSA- 
TION TO  THEIR  EMPLOYEES  FOR    INJURIES    RECEIVED  IN  THE  COURSE 
OF    THEIR    EMPLOYMENT    WHICH    ARE    IN    FORCE  IN    OTHER 
COUNTRIES,    AND    AS    TO    HOW    FAR    SUCH    LAWS 
ARE  FOUND  TO  WORK  SATISFACTORILY. 

By 

THE    HON.   SIR    WILLIAM    RALPH    MEREDITH,    C.J.O.,    Commissioner 


To  His  Honour  Sir  John  Morison  Gibson,  K.C.M.G.,  K.C..  LL.D.,  Lieutenant- 
Governor  of  the  Province  of  Ontario. 

s 

May  it  Please  Your  Honour  : 

T  have  the  honour  to  report  that  I  have  concluded  the  enquiries  which  I  was 
by  Your  Honours  Commission  bearing  date  the  30th  day  of  June,  1910,  appointed 
to  make  "  as  to  the  laws  relating  to  the  liability  of  employers  to  make  compensation 
to  their  employees  for  injuries  received  in  the  course  of  their  employment  which 
are  in  force  in  other  countries,  and  as  to  how  far  such  laws  are  found  to  work 
satisfactorily,''  and  on  the  first  day  of  April,  1913,  I  submitted  to  Your  Honour  a 
draft  bill  embodying  such  changes  in  the  law  as  in  my  opinion  should  be  adopted 
in  this  Province,  and  I  now  proceed  to  state  my  reasons  for  recommending  that 
the  draft  bill  should  be  passed  into  law. 

At  the  outset  of  the  enquiry  it  was  contended  by  those  who  spoke  on  behalf 
of  the  workingmen :  (1)  That  the  law  of  Ontario  is  entirely  inadequate  in  the 
conditions  under  which  industries  are  now  carried  on  to  provide  just  compensation 
for  those  employed  in  them  who  meet  with  injuries,  or  suffer  from  industrial 
diseases  contracted  in  the  course  of  their  employment;  and  (2)  that  under  a  just 
law  the  risks  arising  from  these  causes  should  be  regarded  as  risks  of  the  industries 
and  that  compensation  for  them  should  be  paid  by  the  industries. 

With  these  two  propositions  those  representing  the  employers  expressed  their 
agreement,  though  it  is  fair  to  say  that  it  was  probably  not  intended  to  agree 
that  compensation  should  be  paid  in  respect  of  industrial  diseases. 

Agreeing  as  I  did  with  the  contention  of  the  workingmen  there  remained 
only  to  be  considered  in  what  form  and  by  what  means  the  compensation  should 
be  provided. 

For  the  purpose  of  reaching  a  conclusion  as  to  this,  and  in  obedience  to  the 
directions  of  the  Commission,  I  made  enquiry  as  to  the  laws  in  force  in  the  principal 
European  countries,  in  the  United  States  of  America  and  in  the  Provinces  of 
Canada.  I  also  visited  Belgium,  England,  France,  and  Germany,  and  con- 
sulted those  concerned  in  administering  the  laws  of  those  four  countries,  and  others 

[3] 


1  FINAL  REPORT  OP  THE  COMMISSIONER.  No.  53 

qualified  to  judge  as  to  whether  they  have  beeu  found  to  work  satisfactorily.  Much 
evidence  has  been  taken  bearing  upon  the  general  question,  all  of  which  appears 
in  the  appendix  to  my  first  interim  report,  dated  the  27th  day  of  March,  1912, 
and  the  appendix  to  this  report. 

Before  referring  to  the  different  systems  in  operation  it  may  be  proper  to  say 
that  most  of  these  laws,  and  perhaps  all  of  them  except  the  German,  have  not  been 
in  force  long  enough  to  enable  a  conclusive  opinion  to  be  formed  as  to  their  merits 
or  demerits. 

There  are  two  main  types  of  compensation  laws.  By  one  of  them  the  em- 
ployer is  individually  liable  for  the  payment  of  it,  and  that  is  the  British  system. 
By  the  other,  which  may  be  called  the  German  system,  the  liability  is  not  individual 
but  collective,  the  industries  being  divided  into  groups,  and  the  employers  in  the 
industries  in  each  group  being  collectively  liable  for  the  payment  of  the  compen- 
sation to  the  workmen  employed  in  those  industries — practically  a  system  of  com- 
pulsory mutual  insurance  under  the  management  of  the  State.  The  laws  of  other 
countries  are  of  one  or  other  of  these  types,  or  modified  forms  of  them,  and  in 
most,  if  not  all  of  them,  in  which  the  principle  of  individual  liability  obtains, 
employers  are  required  to  insure  against  it. 

Those  representing  the  workingmen  at  the  beginning  of  the  enquiry  appeared 
to  favour  the  adoption  of  the  British  system.  Mr.  F.  W.  Wegenast,  who  represented 
the  Canadian  Manufacturers  Association,  strongly  urged  the  adoption  of  the  Ger- 
man system,  and  his  view  was  supported  by  most  of  the  other  employers  who  ap- 
peared or  were  represented  before  me,  and  later  on  in  the  enquiry  the  representa- 
tives of  the  workingmen  fell  in  with  Mr.  Wegenast' s  views. 

There  were,  however,  differences  of  opinion  as  to  details.  The  employers 
insisted  that  a  part  of  the  assessments  to  provide  for  the  payment  of  the  com- 
pensation should  be  paid  by  the  employees,  and  this  was  vigorously  opposed  by 
the  representatives  of  the  workingmen.  The  employers  desired  that  no  compen- 
sation should  be  payable  where  the  injury  to  the  workman  did  not  disable  him 
from  earning  full  wages  for  at  least  seven  days,  and  to  this  the  representatives 
of  the  workingmen  objected.  The  employers  also  desired  that,  as  the  British  act 
provides,  an  employee  should  not  be  entitled  to  compensation  if  his  injury  was  due 
to  his  own  serious  and  wilful  misconduct,  but  the  representatives  of  the  working- 
men  objected  to  any  such  limitation  of  the  right  to  compensation. 

As  stated  in  my  first  interim  report,  1  had  then  come  to  no  conclusion  as  to 
these  matters,  or  as  to  what  system  of  compensation  I  should  recommend  for 
adoption,  nor  had  I  reached  a  conclusion  as  to  the  industries  to  which  the  law 
should  be  made  applicable,  nor  as  to  certain  other  details  which  I  enumerated  in 
my  report. 

After  the  best  consideration  I  was  able  to  give  to  the  important  matters  as  to 
which  I  was  commissioned  by  Your  Honour  to  make  recommendations,  I  came  to 
the  conclusion,  to  which  I  still  adhere,  that  a  compensation  law  framed  on  the 
main  lines  of  the  German  law  with  the  modifications  I  have  embodied  in  my  draft 
bill  is  better  suited  to  the  circumstances  and  conditions  of  this  Province  than  the 
British  compensation  law,  or  the  compensation  law  of  any  other  country. 

I  have  had  the  benefit  of  hearing  the  opinions  of  Mr.  Miles  M.  Dawson,  Mr. 
S.  H.  Wolfe,  Mr.  P.  Tecumseh  Sherman,  and  Mr.  F.  W.  Wegenast,  all  of  whom 
have  given  special  attention  to  the  subject  of  compensation  laws  and  industrial 
accident  insurance,  as  to  the  operation  of  those  laws,  and  as  to  the  best  form  of 
compensation  law  to  be  adopted  under  the  conditions  which  obtain  in  this  Province, 


1914  WORKMEN'S  COMPENSATION  COMMISSION.  5 

and  also  of  hearing  the  opinions  of  Mr.  James  Harrington  Boyd,  who  had  a  large 
part  in  framing  the  compensation  law  passed  by  the  Legislature  of  the  State  of 
Ohio,  and  of  Mr.  F.  W.  Hinsdale,  the  chief  auditor  of  the  Industrial  Insurance 
Board  of  the  State  of  Washington,  as  to  the  operation  of  the  compensation  laws  of 
those  States,  and  also  upon  the  general  question  as  to  the  best  form  of  compen- 
sation law  for  this  Province." 

These  gentlemen  differed  widely  in  their  opinions  as  to  the  best  form  of 
compensation  law,  as  will  be  seen  from  their  testimony  and  arguments  which  appear 
in  the  appendices  to  my  report,  and  from  the  memoranda  submitted  by  Mr.  Wolfe 
and  Mr.  Sherman,  although  they  are  practically  unanimous  as  to  the  industries 
bearing  the  burden  of  the  compensation,  and,  with  the  exception  of  Mr.  Wegenast, 
they  are  all  of  opinion  that  this  burden  should  be  borne  equally  by  the  employer 
and  employed. 

Mr.  Sherman  is  opposed  to  the  system  of  collective  liability,  which  he  character- 
izes as  unjust  because  it  imposes  upon  the  individual  employer  the  obligation  ot 
sharing  the  burden  of  accidents  in  other  establishments  than  his  own  and,  as  he 
assumes,  notwithstanding  that  by  the  introduction  of  the  best  machinery  and  ap- 
pliances and  safeguarding  against  accident  he  has  reduced  the  number  of  accidents 
in  his  establishment  to  a  minimum,  he  is  placed  as  respects  his  liability  to  pay  com- 
pensation on  the  same  footing  as  an  employer  whose  machinery  and  appliances  are 
defective  and  who  takes  little  or  no  precaution  to  guard  against  accidents  in  his 
establishment. 

If  a  uniform  rate  were  payable  by  all  the  employers  in  a  class  or  sub-class, 
regardless  of  these  considerations,  I  agree  that  there  would  be  the  injustice  which 
Mr.  Sherman  points  out,  but  I  have  in  the  draft  bill  which  I  have  submitted  in- 
troduced provisions  (sec.  71,  s.s.  2  and  4)  which,  in  my  opinion,  will  provide  againsl 
that  happening. 

The  arguments  presented  by  Mr.  Dawson  and  Mr.  Wegenast,  and  perhaps  those 
of  Mr.  Wolfe,  in  favour  of  the  collective  system  are,  I  think,  unanswerable  if,  as  I 
believe,  the  true  aim  of  a  compensation  law  is  to  provide  for  the  injured  workman 
and  his  dependants  and  to  prevent  their  becoming  a  charge  upon  their  relatives  or 
friends,  or  upon  the  community  at  large. 

It  is  in  my  opinion  essential  that  as  far  as  is  practicable  there  should  be  cer- 
tainty that  the  injured  workman  and  his  dependants  shall  receive  the  compensation 
to  which  they  are  entitled,  and  it  is  also  important  that  the  small  employer  should 
not  be  ruined  by  having  to  pay  compensation,  it  might  be,  for  the  death  or  per- 
manent disability  of  his  workmen  caused  by  no  fault  of  his.  It  is,  I  think,  a  serious 
objection  to  the  British  act  that  there  is  no  security  afforded  to  the  workman  and 
his  dependants  that  the  deferred  payments  of  the  compensation  will  be  met,  and 
that  objection  would  be  still  more  serious  in  a  comparatively  new  country  such  as 
this,  where  many  of  the  industries  are  small  and  conditions  are  much  less  stable 
than  they  are  in  the  British  Isles. 

This  objection  could,  of  course,  be  met  by  making  it  obligatory  upon  the 
employer  to  insure  his  workmen  against  accident  to  the  maximum  amount  to 
which  they  or  their  dependants  would  be  entitled  under  the  act,  but  if  insurance 
is  to  be  compulsory  I  see  no  reason  why  the  cheapest  form  of  it— mutual  insurance 
— should  not  be  prescribed. 

I  agree  also  with  Mr.  Dawson  that  the  ultimate  burden  of  paying  the  com- 
pensation under  such  a  law  as  is  proposed  falls  upon  the  community  and  that 


FINAL  REPORT  OF  THE  COMMISSIONER.  X...  5 


o 


whatever  the  employer  has  to  pay,  whether  directly  by  way  of  compensation,  or 
if  he  insures  against  his  liability  by  paying  insurance  premiums,  forms  part  of 
the  cost  of  that  which  he  produces  and  is  added  to  the  selling  price. 

Mr.  Sherman's  view  is  that  insurance  should  be  made  compulsory  "only  if 
and  when  reasonably  necessary  in  order  to  assure  to  the  injured  workmen  the 
payment  of  their  compensation,"  and  that  "in  no  event  should  those  concerns 
that  are  amply  able  to  carry  their  own  insurance  be  required  to  buy  insurance 
or  contribute  to  a  State  scheme,  for  that,"  he  says,  "would  be  pure  economic  waste." 

I  do  not  understand  the  latter  argument  or  how  there  can  be  said  to  be 
economic  waste  if  the  "concerns"  he  mentions  are  not  required  to  do  more  than 
contribute  with  other  employers  to  the  payment  of  compensation  according  to  the 
hazard  of  their  respective  businesses.  I  could  understand  that  there  might  be 
economic  waste  if  it  were  incumbent  on  such  an  employer  to  insure  with  a  joint 
stock  company  which  would  require  him  to  pay  a  premium  sufficient  to  provide 
for  the  cost  of  securing  the  business  and  a  reasonable  dividend  to  its  shareholders 
as  well  as  to  indemnify  against  the  risk  undertaken. 

There  was  much  discussion  as  to  the  basis  on  which  the  assessments  to  provide 
the  compensation  should  be  made.  The  German  law  provides  for  assessing  only 
for  the  amounts  required  to  meet  the  payments  of  compensation  which  fall  due 
during  the  year  next  preceding  that  in  which  the  assessments  are  made,  with  an 
added  percentage  to  provide  a  reserve  fund  to  meet  deficiencies  in  the  accident  fund 
in  the  event  of  an  unusual  catastrophe  or  a  depression  in  trade,  but  no  assessment 
is  made  beyond  that  to  meet  the  deferred  payments  of  compensation,  i.e.,  the 
paymenlts  which  are  to  become  due  in  future  years.  This  plan,  popularly  called 
the  current  cost  plan,  is  that  proposed  by  the  Canadian  Manufacturers  Associa- 
tion, and  Mr.  Dawson  favours  it  as  not  only  expedient  because  it  does  not  involve 
making  the  heavy  assessments  which  would  have  to  be  made  at  the  outset  if  the 
capitalized  value  of  the  deferred  payments  had  to  be  provided  for  by  the  assess- 
ments, but  also  as  "not  unfair  to  the  employers  in  future  years,  or  economically 
unsound." 

On  the  other  hand  the  current  cost  plan  is  vigorously  denounced  by  Mr. 
Sherman,  who  contends  that  it  is  manifestly  unfair  to  the  employer  of  the  future 
because  it  shifts  upon  his  shoulders  part  of  the  burden  of  compensating  for  acci- 
dents which  have  happened  before  he  became  an  employer,  and  that  it  results  in 
low  assessments  in  the  early  years  of  the  operation  of  the  law,  and  necessarily 
increases  in  the  later  years,  until  in  a  measurable  period  of  time  they  become  a 
burden  too  oppressive  for  the  employer  of  the  future  to  bear. 

In  support  of  his  view  Mr.  Sherman  referred  to  the  rates  in  Germany,  which 
he  said,  "now  average  about  double  what  they  were  at  the  beginning,"  and  lie 
added  that  "it  is  calculated  that  they  will  not  reach  their  stable  maximum  for 
some  twenty  years  more.  How  much  more  they  will  then  be  no  one  knows,  but 
the  majority  guess  is  they  will  then  double." 

Mr.  Wolfe  is  equally  emphatic  in  his  condemnation  of  the  current  cost  plan, 
and  in  addition  to  his  oral  testimony  presented  a  table  which  appears  on  page  147 
of  the  appendix  to  this  report,  and  which  he  contended  demonstrates  the  accuracy 
of  his  conclusions. 

The  views  of  Mr.  Sherman  and  Mr.  Wolfe  were  controverted  by  Mr.  Wegenast, 
who  contended  that  statistics  prove  that  in  some  instances  the  stable  maximum 
has  already  been  reached  and  that  there  i^  nothing  to  justify  the  gloomy  fore- 
bodings of  Mr.  Sherman  :is  to  the  future. 


1914  WORKMEN'S  COMPENSATION   COMMISSION.  1 


Mr.  Wegenast's  contention  is  hardly  supported  by  Mr.  Dawson,  whose  opinion 
(page  io'l,  appendix  to  first  interim  report)  is  that  there  will  be  an  increasing  rate 
"which  is  estimated  to  increase  pretty  rapidly  for  about  ten  years  and  then  rather 
slowly  and  with  increasing  slowness  for  at  least  fifteen  years  longer,  and  if  there 
is  no  improvement  in  the  conditions  relating  to  trade  and  industry,  it  will  still 
very   slowly  increase  for  twenty-five  years  beyond  that." 

I  am  not  convinced  that  the  German  plan  affords  an  adequate  safeguard  against 
the  dangers  which  Mr.  Sherman  anticipates,  nor  am  I  satisfied  that  it  does  not  do 
so.  I  have,  therefore,  concluded  that  the  act  should  not  lay  down  any  hard  and  fast 
rule  as  to  the  amount  which  shall  be  raised  to  provide  a  reserve  fund  and  that  it  is 
better  to  leave  that  to  be  determined  'by  the  Board  which  is  to  have  the  collection 
and  administration  of  the  accident  fund  as  experience  and  further  investigations 
may  dictate.  I  have  therefore  made  provision  in  the  draft  bill  to  that  end,  by  mak- 
ing it  '"'the  duty  of  the  Board  at  all  'times  to  maintain  the  accident  fund  so  that  with 
the  reserves  it  shall  be  sufficient  to  meet  all  the  payments  to  be  made  out  of  the  fund 
in  respect  of  compensation  as  they  become  payable  and  so  as  not  unduly  or  unfairly 
to  burden  the  employers  in  any  class  in  future  years  with  payments  which  are  to  be 
made  in  those  years  in  respect  of  accidents  which  have  previously  happened," 
(sec.  7.0),  and  by  authorizing  the  Lieutenant-Governor  in  Council  if  in  his 
opinion  the  Board  has  not  performed  that  duty  to  require  the  Board  to  make  a 
supplementary  assessment  of  such  sum  as  in  his  opinion  is  necessary  to  be  added 
to  the  fund.  (sec.  90),  and  these  provisions  I  deem  essential  to  the  safety  and 
adequacy  of  the  scheme  of  compensation  for  which  the  draft  bill  provides. 

I  may  here  point  out  that  the  act  of  the  State  of  Washington  upon  which 
the  draft  bill  submitted  by  the  Canadian  Manufacturers  Association,  to  which  I 
shall  afterwards  refer,  is  modeled,  requires  that  for  every  case  of  injury  resulting 
in  death  or  permanent  total  disability  there  shall  be  set  apart  out  of  the  accident 
fund  the  estimated  present  value  of  the  monthly  payments  to  which  the  workman 
or  his  dependants  are  entitled,  the  total  in  no  case  to  exceed  $1,000. 

Mr.  Sherman  also  takes  strong  grounds  against  the  administration  of'  the 
act  being  committed  to  a  Board  appointed  'by  the  State,  his  view  being  that  such 
a  Board  will  be  influenced  by  partisan  political  considerations  in  practically  all  its 
doings.  I  have  no  such  fear.  Whatever  else  may  he  doubtful  as  to  the  workings  of 
the  act  there  is  no  doubt,  I  think,  that  the  members  of  the  Board  appointed  by  the 
Crown  will  impartially  and  according  to  the  best  of  their  ability  discharge  the 
important  duties  which  will  devolve  upon  them  in  the  event  of  the  draft  bill 
becoming  law.  Whatever  may  be  the  experience  of  other  countries  the  experience 
of  Canada  does  not  justify  the  view  which  Mr.  Sherman  entertains.  There  are 
now  two  Provincial  Commissions  appointed  by  the  Crown  discharging  very  im- 
portant duties— the  Ontario  Railway  and  Municipal  Board  and  the  Hydro-Electric 
Power  Commission — and  one  appointed  by  the  Governor-General  also  discharging 
very  important  duties — the  Railway  Commission  of  Canada.  Whatever  criticisms 
there  may  have  been  of  the  action  of  these  Boards,  no  one,  as  far  as  I  have  heard, 
has  ever  charged  or  even  suggested  that  any  member  of  them  has  been  actuated 
or  influenced  by  partisan  political  considerations  in  any  action  that  has  been  taken 
by  him  and  I  know  of  no  reason  why  the  Board  which  i<  provided  for  by  the 
draft  bill  may  not  be  expected  to  be  as  free  from  political  partisanship  as  either 
of  the  Boards  I  have  mentioned. 

I  proceed  now  to  state  the  general  plan  upon  which  the  bill  has  been  drafted. 
The  bill  is  divided  into  Parts.  In  Part  I  the  liability  of  employers  to  contri- 
bute to  the  accident  fund  or  to  pay  the  compensation   individually  is  dealt  with. 


8  FINAL  REPORT  OP  THE  COMMISSIONER.  No.  53 


The  bill  does  not  provide  for  making  all  employers  liable  to  pay  compensation, 
but  only  those  in  the  industries  enumerated  in  schedules  1  and  2,  and  provision  is 
made  for  industries  enumerated  in  schedule  2  being  added  to  schedule  1  when- 
ever the  Board  deems  it  expedient  to  add  them.  Schedule  1  includes  all  the 
industries  which  it  is  proposed  by  the  draft  bill  of  the  Canadian  Manufacturers 
Association  to  bring  within  the  scope  of  the  act,  except  those  enumerated  in 
schedule  2. 

The  inclusion  of  railways  in  schedule  1  was  opposed  by  the  three  principal 
steam  railway  companies  and  by  some  of  the  other  railway  companies,  and  I  saw 
no  reason  why  their  wishes  should  not  be  met  if  by  meeting  them  the  act  would 
not  be  rendered  less  beneficial  to  the  employees  and  no  injustice  would  he  done 
to  the  employers  in  the  industries  included  in  the  schedule.  The  draft  bill  has 
been  framed  so  as,  in  my  opinion,  to  work  no  injustice  to  anyone  and  not  less 
beneficially  to  the  employees  owing  to  railways  being  excluded  from  the  schedule. 

The  only  difference  between  the  operation  of  the  act  as  to  industries  in 
schedule  1  and  those  in  schedule  2  is  that  employers  in  the  former  contribute  to 
the  accident  fund  and  in  that  way  pay  collectively  the  compensation,  while  em- 
ployers in  the  latter  do  not  contribute  to  the  accident  fund  but  are  liable  individ- 
ually for  the  compensation  payable  to  their  employees.  In  other  respects  the 
operation  of  the  act  is  the  same  in  both  cases.  The  Board  determines  the  amount 
of  the  compensation  in  both  cases  and  its  orders  when  filed  in  a  County  or  District 
Court  become  orders  of  the  court  and  may  be  enforced  as  judgments  of  it. 

The  reasons  for  adopting  the  collective  system  have  practically  no  application 
to  railways,  especially  when,  as  has  already  been  done  in  Ontario  and  will,  I  do 
not  doubt,  be  done  when  the  Parliament  of  Canada  meets,  provision  is  made  that 
all  sums  payable  for  compensation  shall  form  part  of  the  working  expenditure  of 
the  railway  company,  which  is  a  first  charge  upon  its  revenues. 

It  is  manifest,  I  think,  that  schedule  1  should  not  include  industries  of 
Municipal  Corporations  or  Commissions,  Public  Utilities  Commissions,  Trustees 
of  Police  Villages  and  School  Boards,  and  they  have  therefore  been  included  in 
schedule  2. 

Schedule  2  also  includes  the  industries  of  telephone  companies  and  navigation 
companies.  These  industries,  like  those  of  railway  companies,  are  exceptional  in 
their  character,  and  the  reasons  for  adopting  the  collective  system  have  no  appli- 
cation to  them. 

In  order  that  additional  security  may  be  afforded  that  the  compensation  to 
wiiich  employees  in  the  industries  in  schedule  2  and  their  dependants  may  become 
entitled  will  be  paid,  provisions  are  embodied  in  the  draft  bill  enabling  the  Board 
to  require  an  employer  in  any  industry  included  in  the  schedule  to  commute  the 
weekly  or  other  periodical  payments  of  compensation,  (sees.  27  and  28),  and  also 
to  insure  his  workmen  and  keep  them  insured  against  accidents  in  a  company 
approved  of  by  the  Board  for  such  sum  as  the  Board  may  direct. 

If  it  had  been  practicable  to  do  so  without  impairing  the  efficiency  of  the 
collective  system  I  should  have  preferred  to  include  a  larger  number  of  industries 
in  schedule  2  in  order  that  with  the  two  systems  working  side  by  side  experience 
might  demonstrate  whether  the  collective  system  or  that  of  individual  liability 
was  preferable,  but  I  have  not  been  able  to  satisfy  myself  that  the  exclusion  from 
schedule  1  of  any  considerable  number  of  the  industries  included  in  it  would  not 
impair  the  efficiency  of  the  collective  system,  and  I  have  therefore  excluded  from 


1914  WORKMEN'S  COMPENSATION  COMMISSION. 


it  only  the  industries  enumerated  in  schedule  2.  Although  but  a  small  number 
of  industries  are  included  in  that  schedule  the  operation  of  the  two  systems  will 
afford  some  evidence  as  to  which  is  the  better. 

Another  reason  why  it  is  not  expedient  to  bring  these  omitted  industries 
within  the  scope  of  the  act  is  that  by  doing  so  the  initial  work  of  the  Board  would 
he  very  greatly  augmented  and  the  risk  would  be  run  that  it  would  be  so  over- 
burdened as  practically  to  paralyze  its  operations.  It  is.  in  my  opinion,  nine!; 
better  that  if  these  industries  are  to  be  brought  in  that  should  be  done  later  on. 

As  what  1  have  said  has  indicated,  I  have  not  thought  it  advisable  at  the 
outset  to  bring  within  the  scopeof  Part  I  all  employments.  The  principal  indus- 
tries excluded  are  the  farming,  wholesale  and  retail  establishments,  and  domestic 
service.  There  is,  I  admit,  no  logical  reason  why,  if  any,  all  should  not  be  in- 
cluded, but  I  greatly  doubt  whether  the  state  of  public  opinion  is  such  as  to  justify 
such  a  comprehensive  scheme,  and  it  is  probable  that  when  the  question  of  bringing 
these  industries  within  the  scope  of  the  act  has  to  be  considered,  it  will  he  found 
that  provisions  somewhat  different  from  those  which  are  applicable  to  the  indus- 
tries which  it  is  proposed  now  to  bring  within  it  will  be  necessary. 

I  have  however  made  provision  for  bringing  any  of  these  excluded  industries 
within  the  scope  of  Part  I  if  and  when  the  Board  deems  it  proper  to  do  so,  and  its 
regulation  or  order  bringing  them  in  is  approved  by  the  Lieutenant-Governor  in 
Council. 

The  bill  would,  in  my  opinion,  fail  to  do  justice  to  a  large  body  of  em- 
ployees who  will  not  be  entitled  to  compensation  under  Part  I,  if  it  did  not 
provide  for  a  substantial  modification  of  the  common  law  as  to  the  liability  of  the 
employer  to  answer  in  damages  to  an  employee  who  is  injured  owing  to  the 
negligence  of  the  employer  or  his  servants. 

According  to  the  common  law  it  is  a  term  of  the  contract  of  service  that  the 
servant  takes  upon  himself  the  risks  incidental  to  his  employment  (popularly  called 
the  assumption  of  risk  rule),  and  that  this  risk  includes  that  of  injury  at  the 
hands  of  fellow-servants,  (popularly  called  the  doctrine  of  common  employment). 
The  doctrine  of  common  employment  is  an  exception  to  the  general  rule  that  the 
master  is  responsible  for  the  acts  of  his  servants  when  engaged  in  his  work,  and 
has  rightly,  I  think,  often  been  declared  unfair  and  inequitable.  The  reasoning 
upon  which  the  exception  was  justified  in  the  celebrated  case  of  Priestley  v  Fowler 
does  not  commend  itself  to  me  as  satisfactory,  and  I  doubt  whether  if  the 
question  were  to  arise  now  for  the  first  time  the  same  conclusion  would  be  reached. 
The  case  was  decided  at  a  time  when  very  different  views  as  to  the  respective 
rights  and  duties  of  employer  and  employed  prevailed  than  are  entertained  at  the 
present  day,  and  at  a  time  not  far  removed  from  that  in  which  there  was  upon  the 
Imperial  statute  book  a  law  which  made  it  a  criminal  offence  punishable  with 
imprisonment  for  "  journeymen  manufacturers  or  others "  to  agree  together  for 
obtaining  an  advance  of  the  wages  of  themselves  or  of  any  one  else,  or  for  lessening 
or  altering  their  usual  hours  or  time  of  working. 

The  unfairness  of  this  doctrine  has  been  recognized  by  the  Imperial  Parlia- 
ment and  by  the  Legislature  of  this  Province  in  the  enactment  of  employers' 
liability  acts  which  have  modified  it  but  to  a  very  limited  extent. 

In  referring  to  the  legislation  of  this  Province  my  reference  is  to  the  act 
called  the  Workmen's  Compensation  for  Injuries  Act,  which  is  erroneously  so 
styled,  for  it  is  really  an  employers'  liability  act. 


10  FIXAL  REPOKT  OF  THE  COMMISSIONER.  No.  53 

In  my  opinion  there  is  no  reason  why  this  objectionable  doctrine  should  not, 
as  one  of  the  provisions  of  Part  II  of  the  draft  bill  provides,  be  entirely  abrogated. 

The  draft  bill  also  provides  for  the  abrogation  of  the  assumption  of  risk  rule. 

The  rule  is  based  upon  the  assumption  that  the  wages  which  a  workman 
receives  include  compensation  for  the  risks  incidental  to  his  employment  which  he 
has  to  run.  That  is,  in  my  judgment,  a  fallacy  resting  upon  the  erroneous  assump- 
tion that  the  workman  is  free  to  work  or  not  to  work  as  he  pleases  and  therefore 
to  fix  the  wages  for  which  he  will  work,  and  that  in  fixing  them  he  will  take  into 
account  the  risk  of  being  killed  or  injured  which  is  incidental  to  the  employment 
in  which  he  engages. 

Another  rule  of  the  common  law  is  unfair  to  the  workman.  Although  the 
employer  has  been  guilty  of  negligence,  if  the  workman  has  been  guilty  of  what 
is  called  contributory  negligence  and  his  injury  was  occasioned  by  their  joint 
negligence  the  employer  is  not  liable.  The  injustice  of  this  rule  consists  in  this, 
that  though  the  employer  may  have  been  guilty  of  the  grossest  negligence,  if 
the  workman  has  been  guilty  of  contributory  negligence,  however  slight  it  may 
have  been)  and  his  injury  was  occasioned  by  the  joint  negligence,  the  employer 
is  not  liable. 

It  is  proposed  by  the  draft  bill  to  substitute  for  this  rule  that  of  comparative 
negligence  as  it  is  called,  and  provide  that  contributory  negligence  shall  not  be 
a  bar  to  recovery  by  the  workman  or  his  dependants  but  shall  be  taken  into 
account  in  the  assessment  of  damages. 

That  in  making  these  recommendations  I  am  not  advancing  any  novel  proposi- 
tion is  shown  by  the  fact  that  what  I  propose  should  be  done  in  this  Province 
has  already  been  done  in  some  of  the  States  of  the  neighbouring  Republic,  and 
that  the  rules  which  it  is  proposed  to  abrogate  or  modify  no  longer  meet  the 
requirements  of  modern  industrial  conditions  and  are  unjust  as  applied  to  the 
complex  relations  of  master  and  servant  as  now  existing,  and  to  the  use  of  com- 
plicated machinery  and  the  great  and  dangerous  forces  of  steam  and  electricity 
of  to-day  is  the  generally  accepted  view,  and  was  the  unanimous  opinion  of  the 
Employers'  Liability  and  Workmen's  Compensation  Commission  of  the  United 
States  (Report  of  Commission,  Vol.  I,  pages  1,213  and  1,214). 

Having  outlined  the  provisions  of  the  draft  bill  I  have  submitted  to  Your 
Honour  and  stated  my  reasons  for  recommending  their  adoption  I  proceed  to  a 
consideration  of  those  provisions  of  the  draft  bill  submitted  on  behalf  of  the 
Canadian  Manufacturers  Association  and  which,  I  assume,  embodies  its  views  as 
to  the  form  which  a  proper  compensation  law  should  take,  which  differ  from 
those  of  my  draft  bill,  omitting  such  of  the  points  of  difference  as  I  have  already 
discussed. 

The  compulsory  provisions  of  the  draft  bill  of  the  Association  apply  only  to 
industries  in  which  three  or  more  persons  are  regularly  employed,  but  the  option 
is  given  to  employers  in  industries  in  which  less  than  three  persons  are  employed 
to  come  under  the  provisions  of  the  act.  The  application  of  the  act  is  not  so 
limited  in  my  draft  bill,  but  provision  is  made  (sec.  73)  that  the  Board  may 
withdraw  or  exclude  from  a  class  industries  in  which  not  more  than  a  stated 
number  of  workmen  arc  employed,  and  that  an  employer  in  any  industry  so  with- 
drawn or  excluded  may  nevertheless  elect  to  become  a  member  of  the  class  to 
which  but  for  the  withdrawal   or  exclusion  he  would  have  belonged. 

In  my  opinion  it  is  most  undesirable  that  there  should  be  any  such  limitation 
of  the  application  of  the  act  as  the  Association  proposes.  As  I  have  already  pointed 
out,  it  is  to  industries  in  which  a  small  number  of  workmen  arc  employed  that 


1914  WORKMEN'S  COMPENSATION  COMMISSION.  11 


the  provisions  of  such  an  ad  arc  peculiarly  applicable — as  to  the  small  employer, 
to  prevent  his  being  ruined  as  the  result  of  an  accident  in  his  establishment,  and  as 
to  his  workman  to  insure  that  he  will  be  compensated  if  he  meets  with  an  accident. 

I  am  very  doubtful  whether  it  is  desirable  to  adopt  the  provisions  of  section 
73  of  my  draft  bill.  My  object  in  introducing  them  was  to  make  easier  the  work 
of  the  Board  at  the  outset,  and  not  with  any  idea  that  the  power  would  be 
exercised  except  as  a  temporary  expedient  to  lessen  the  work  of  the  Board  in  the 
early  stages  of  the  administration  of  the  act. 

The  proposition  advanced  on  behalf  of  the  Association  in  the  early  stages  of 
my  enquiry,  that  employees  should  he  required  to  contribute  to  the  accident  fund, 
has  apparently  been  abandoned,  as  I  do  not  find  in  its  draft  bill  any  provision  of 
that  kind.  I  find  in  it,  however,  a  provision  (sec.  43)  that  the  Board,  if  satisfied 
that  in  any  employment  the  workmen  are  "  desirous  of  an  increase  in  the  scale  of 
compensation  and  are  willing  to  pay  the  necessary  increase  in  premiums,  may  by 
order  sanction  any  such  increased  scale  and  may  provide  the  method  of  collecting 
the  increase  in  the  premiums  from  the  workmen  in  such  employment." 

In  my  opinion  it  is  not  desirable  to  complicate  the  act  by  the  introduction 
of  any  such  provision.  It  would  not,  I  think,  be  taken  advantage  of  by  workmen, 
and  it  is  difficult  for  me  to  understand  exactly  what  it  means.  Is  it  intended 
that  it  shall  be  applicable  to  a  single  establishment  or  only  to  a  class?  Are  the 
workmen  to  be  unanimous,  or  can  the  power  which  the  section  confers  be  exercised 
if  a  majority  of  them  desires  an  increase  in  the  scale  of  compensation  on  the 
prescribed  condition?  If  the  workmen  must  be  unanimous,  the  section,  I  have 
no  doubt,  will  be  a  dead  letter.  If  it  is  intended  that  a  majority  shall  suffice,  the 
provision  is,  in  my  judgment,  highly  objectionable.  Sub-section  2  of  the  section 
seems  to  be  inconsistent  with  sub-section  1  or  incomplete,  in  not  providing  that 
if  the  employer  pays  the  increased  premium  he  may  deduct  it  from  the  wages 
of  the  workmen. 

The  mode  in  which  the  assessments  are  to  be  collected  proposed  by  the 
Association  differs  somewhat  from  that  provided  for  by  my  draft  bill.  The  mode 
which  I  provide  for  is,  I  think,  the  simpler. 

I  do  not  like  the  term  "premium"  which  is  used  in  the  Association's  draft 
bill  to  designate  the  rate  at  which  the  employer  is  to  be  assessed.  I  prefer  the 
terminology  which  I  have  used.  What  is  levied  by  the  Board  is  not  a  premium 
but  an  assessment. 

The  draft  bill  of  the  Association  has  hut  one  schedule  of  industries  to  ail  of 
which  the  act  applies,  and  it  makes  no  provision  for  abrogating  or  modifying  the 
rules  of  the  common  law  as  to  employers  who  are  not  within  the  scope  of  the  act. 
How  my  draft  bill  differs  from  this  will  be  apparent  from  what  I  have  said  in 
dealing  with  the  general  plan  upon  which  it  has  been  drafted. 

By  my  draft  bill  (sec.  60)  the  Board  is  given  exclusive  jurisdiction  as  to  all 
matters  and  questions  arising  under  Part  I,  and  subject  to  its  power  to  rescind, 
alter  or  amend  any  of  its  decisions  or  orders,  its  action  or  decision  is  final  and  is 
not  subject  to  appeal. 

It  is  difficult  to  understand  from  the  Association's  draft  bill  what  the  juris- 
diction of  the  Board  is  intended  to  be.  Section  21  provides  that  the  Board  shall 
have  jurisdiction  to  enquire  into,  hear  and  determine  all  matters  and  questions  of 
fact  and  law  necessary  to  he  determined  in  connection  with  compensation  payments 
and  the  administration  thereof  and  the  collection  and  management  of  the  funds 
thereof. 


12  FINAL  EEPOET  OF  THE  COMMISSIONEE.  No.  53 

This  language  would  confer  on  the  Board  a  rather  limited  jurisdiction  and 
probably,  judging  from  the  provisions  of  section  22,  less  than  the  draftsman 
intended  it  should  have.  The  decisions  and  findings  of  the  Board  upon  questions 
of  fact  are  made  final  and  conclusive,  but  on  questions  of  law  an  appeal  is  allowed. 

In  my  opinion  it  is  most  undesirable  that  there  should  be  the  appeal  for 
which  the  draft  bill  provides.  A  compensation  law  should,  in  my  opinion,  render 
it  impossible  for  a  wealthy  employer  to  harass  an  employee  by  compelling  him  to 
litigate  his  claim  in  a  court  of  law  after  he  has  established  it  to  the  satisfaction  of 
a  Board  such  as  that  which  is  to  be  constituted,  and  which  will  be  probably  quite  as 
competent  to  reach  a  proper  conclusion  as  to  the  matters  involved,  whether  of  fact 
or  law,  as  a  court  of  law. 

I  may  point  out  that  section  23,  which  allows  an  appeal  from  the  decision  of 
the  Board  on  "questions  of  law,"  appears  to  be  inconsistent  with  section  22, 
for  in  the  determination  of  the  questions  enumerated  in  that  section  which  are  to 
be  deemed  questions  of  fact  it  may  be  necessary  to  decide  questions  of  law,  and 
I  confess  that  I  do  not  quite  understand  what  kind  of  questions,  if  those  enum- 
erated in  section  22  are  eliminated,  it  is  intended  to  make  appealable. 

In  a  note  to  section  22  it  is  stated  that  "  it  is  submitted  that  it  would  not  be 
wise  to  entirely  shut  out  appeals  and  place  in  the  hands  of  the  Board  the  sole 
right  to  interpret  the  act  ...  .  and  the  right  to  define  its  own  jurisdiction." 
What  danger  is  to  be  apprehended  from  conferring  these  rights  I  do  not  under- 
stand, nor  do  I  see  what  questions  as  to  the  construction  of  the  act  are  likely  to 
arise  other  than  those  enumerated  in  section  22. 

In  my  judgment  the  furthest  the  Legislature  should  go  in  allowing  the  inter- 
vention of  the  courts  should  be  to  provide  that  the  Lieutenant-Governor  in  Council 
may  state  a  case  for  the  bpinion  of  a  Divisional  Court  of  the  Appellate  Division 
of  the  Supreme  Court  of  Ontario,  if  any  'question  of  law  of  general  importance 
arises  and  he  deems  it  expedient  it  should  be  settled  by  a  decision  of  a  Divisional 
Court.  Although  I  say  this  my  judgment  is  against  the  introduction  of  any  such 
provision,  as  it  is  probable  that  if  any  form  of  appeal  to  an  appellate  court  is 
allowed,  a  defeated  litigant  will  have  the  right  to  take  his  case  to  the  Judicial 
Committee  of  His  Majesty's  Privy  Council. 

Section  10  of  my  draft  bill,  which  deals  with  the  case  of  sub-contractors  and 
is  applicable  only  to  industries  mentioned  in  schedule  2,  is  taken  from  the  British 
Compensation  Act.  As'the  Association's  draft  bill  does  not  provide  for  individual 
liability  in  any  case,  no  provision  corresponding  to  section  10  is  found  in  it. 

Sections  66,  67,  and  68  of  the  Association's  draft  hill  deal  with  the  case  of 
sub-contractors.     They  are,  in  my  opinion,  unnecessary  and  undesirable. 

The  draft  bill  of  the  Association  is  made  to  apply  to  the  Crown.  My  draft 
bill  is  not.  Apart  from  the  question  of  the  jurisdiction  of  a  Provincial  Legis- 
lature to  affect  the  Crown  as  represented  by  the  Dominion,  it  is  in  my  opinion 
inexpedient  that  the  act  should  apply  to  the  Crown.  It  would  be  quite  anomalous 
to  group  the  Crown  in  respect  of  road-making,  for  instance,  with  other  road- 
makers,  and  to  make  a  — <-smcnts  upon  the  Crown  as  in  the  case  of  private  persons. 

T  have  no  doubt  that  in  case  of  injury-  to  an  employee  of  the  Crown,  for  which 
if  his  employer  were  a  private  person  he  would  be  entitled  to  compensation. 
the  Crown  would  make  the  like  compensation  lo  him  and  avail  itself  of  the  services 
of  (ho  Board  for  the  determination  of  the  amount  and  nature  of  the  compensation. 

The  Association's  draft  hill  (sec.  4)  disentitles  the  workman  and  his  depend- 
ants to  compensation  if  his  injury  was,  in  the  opinion  of  the  Board,  intentionally 


1914  WORKMEN'S  COMPENSATION   COMMISSION.  13 

caused  'by  the  workman,  or  was  due  wholly  or  principally  to  intoxication  or  serious 
and  wilful  misconduct  on  the  part  of  the  workman.  My  draft  bill  provides  that 
compensation  shall  not  be  payable  where  the  injury  is  attributable  solely  to  the 
serious  and  wilful  misconduct  of  the  workman  unless  the  injury  results  in  death 
or  serious  disablement. 

The  provisions  of  section  -i  of  the  Association's  bill  are,  in  my  opinion, 
objectionable.  There  is  no  need  for  the  provision  as  to  intentional  injury  as  an 
injury  purposely  caused  to  himself  by  a  workman  is  not  an  accident,  and  com- 
pensation is  payable  only  in  cases  of  accident  and  industrial  diseases.  In  addition 
to  this  the  definition  of  "  accident "  in  the  interpretation  section  of  my  draft  bill 
(sec.  2)  makes  this  abundantly  clear;  nor  is  there  any  reason  for  introducing  a 
reference  to  intoxication,  the  provision  as  to  serious  and  wilful  misconduct  being 
sufficient  to  cover  any  case  in  which  drunkenness  ought  to  bar  the  right  to  com- 
pensation. Section  4  applies  whatever  may  be  the  result  of  the  injury.  The 
corresponding  provision  of  my  draft  bill,  following  the  British  Compensation  Act, 
does  not  apply  where  the  injury  results  in  death  or  serious  disablement. 

By  my  draft  bill,  following  in  this  respect  the  British  act.  industrial  diseases 
are  put  on  the  same  footing  as  to  the  right  of  compensation  as  accidents.  The 
Association's  bill  applies  only  to  accidents.  The  diseases  to  which  the  act  is  to 
be  made  applicable  are  six  in  number  and  are  enumerated  in  schedule  3  to  my 
draft  bill,  but  power  is  given  to  the  Board  by  its  regulations  to  add  to  the  schedule. 
It  would,  in  my  opinion,  be  a  blot  on  the  act  if  a  workman  who  suffers  from  an 
industrial  disease  contracted  in  the  course  of  his  employment  is  not  to  be  entitled 
to  compensation.  The  risk  of  contracting  disease  is  inherent  in  the  occupation  he 
follows  and  he  is  practically  powerless  to  guard  against  it.  A  workman  may  to 
some  extent  guard  against  accidents,  and  it  would  seem  not  only  illogical  but 
unreasonable  to  compensate  him  in  the  one  case  and  to  deny  him  the  right  to 
compensation  in  the  other. 

The  last  point  of  difference  between  the  two  draft  bills  to  which  I  shall  make 
any  detailed  reference  is  that  as  to  the  scale  of  compensation. 

The  scale  of  compensation  proposed  by  the  Association  is  in  my  opinion  based 
upon  a  wrong  principle  and  will  not  afford  reasonable  compensation  to  the  injured 
workman  and  his  dependants ;  and  indeed  I  doubt  whether,  if  it  were  adopted,  the 
workingmen  would  upon  the  whole  be  in  a  much  better  position  than  they  would 
be  in  without  the  act,  especially  if  the  changes  in  the  common  law  which  I  recom- 
mend are  made. 

A  just  compensation  law  based  upon  a  division  between  the  employer  and  the 
workman  of  the  loss  occasioned  by  industrial  accidents  ought  to  provide  that  the 
compensation  should  continue  to  be  paid  as  long  as  the  disability  caused  by  the 
accident  lasts,  and  the  amount  of  compensation  should  have  relation  to  the  earning 
power  of  the  injured  workman. 

To  limit  the  period  during  which  the  compensation  is  to  be  paid  regardless 
of  the  duration  of  the  disability,  as  is  done  by  the  laws  of  some  countries,  is,  in 
my  opinion,  not  only  inconsistent  with  the  principle  upon  which  a  true  com- 
pensation law  is  based,  but  unjust  to  the  injured  workman  for  the  reason  that  if 
the  disability  continues  beyond  the  prescribed  period  he  will  be  left  with  his 
impaired  earning  power  or,  if  he  is  totally  disabled  without  any  earning  power 
at  a  time  when  his  need  of  receiving  compensation  will  presumably  be  greater  than 
at  the  time  he  was  injured,  to  become  a  burden  upon  his  relatives  or  friends  of 
upon  the  community. 


14  FIXAL  EEPOET  OF  THE  COMM1SSIONEB.  No.  53 


A  uniform  rate  of  compensation  which  has  no  relation  to  the  earning  power 
of  the  workman,  except  as   the  Association's   bill   provides,  for  the   purpose  of 
reducing  the   rate  of   50  per   cent,   of  his   wages   is,   in  my   opinion,   also  incon 
sistent  with  the  principle  upon  which  a  just  compensation  law  is  based,  and  un- 
fair, and  a  most  undesirable  mode  of  fixing  the  amount  of  compensation. 

Not  only  is  the  scale  of  compensation  proposed  by  the  Association  open  to 
these  objections,  but  the  amount  of  the  compensation  is  so  small  that  only  the  lowest 
paid  workman  would  be  compensated  to  the  extent  of  50  per  cent,  of  the  loss  of 
his  earning  power. 

The  case  of  an  unmarried  locomotive  engineer  earning  $150  a  month,  not  an 
unusual  wage  for  the  engineer  of  a  passenger  train,  may  be  taken  to  illustrate  the 
effect  of  the  Association's  proposition.  All  that  he  would  be  entitled  to  if  perm- 
anent disability  resulted  from  his  injury  would  be  $20  a  month,  or  less  than 
14  per  cent,  of  the  loss  of  his  earning  power,  except  in  the  rare  ease  of  his 
being  rendered  completely  helpless  and  requiring  constant  personal  attendance, 
and  in  that  case  his  compensation  would  be  double  that  amount. 

There  are  other  provisions  which  in  my  judgment  are  still  more  objectionable. 
The  limitation  to  $1,500  of  the  amount  of  compensation  in  case  of  permanent 
partial  disability  is,  I  think,  unreasonable,  as  is  manifest  from  the  illustration 
just  given. 

The  payment  of  lump  sums  is  contrary  to  the  principle  upon  which  com- 
pensation acts  are  based  and  is  calculated  to  defeat  one  of  the  main  purposes  of 
such  laws — the  prevention  of  the  injured  workman  hecoming  a  burden  on  his 
relatives  or  friends  or  on  the  community — and  has  been  generally  deprecated  by 
judges  in  working  out  the  provisions  of  the  British  act,  and  was  condemned  by  the 
Association  itself  in  the  memorandum  which  it  submitted,  and  which  appears  in  the 
appendix  to  my  first  interim  report  (pp.  67-60). 

The  proposition  that  the  maximum  compensation  in  case  of  the  loss  of  a 
major  arm  shall  be  $1,500  besides  being  open  to  the  objection  I  have  just  men- 
tioned would  be  most  unfair  in  the  case  of  a  labourer,  to  say  nothing  of  the 
skilled  artisan. 

A  more  unjust  and,  as  it  appears  to  me,  extraordinary  proposition  is  that 
contained  in  clause  (c)  of  section  31,  which  provides  that  in  the  case  of  temporary 
disability  no  compensation  shall  be  payable  unless  it  results  "  in  the  diminution  of 
daily  earnings  to  the  extent  of  at  least  fifty  per  cent " ;  and  as  far  as  I  am  aware, 
and  as  I  should  expect,  there  is  no  precedent  for  it  in  the  legislation  of  any 
country.  As  far  as  1  have  been  able  to  ascertain,  the  furthest  that  any  country 
has  gone  in  that  direction  ds  to  provide,  as  do  the  Washington  act  (s.  5,  clause  d) 
and  the  law  of  Norway  of  July  23rd,  1894,  amended  by  acts  of  December  23rd. 
1899,  and  June  12th,  1906  (art.  1,  par.  2b),  that  no  compensation  shall  be  pay- 
able unless  iIm  '<>--  of  earning  exceeds  five  per  cent.  In  my  opinion  there  is 
no  justification  for  any  such  exception  even  if  it  is  limited  as  in  the  Washington 
and  Norway  laws. 

Tin;  scale  of  compensation  which  I  propose  was  strongly  objected  to  by  the 
Association  as  being  unfair  to  the  manufacturer,  and  as  imposing  upon  him  a 
burden  that  would  handicap  him  in  his  competition  with  the  manufacturers  of 
the  other  Provinces  and  of  other  countries,  and  would  tend  to  divert  manufactur- 
ing from  this  Province  to  other  Provinces  in  which  less  onerous  laws  are  in  force. 
Tt  was  also  urged  thai  the  scale  of  compensation  is  higher  than  that  of  any  other 
country.     The  lasi  objection,  if  a  valid  one,  means  that  there  can  be  no  progress 


1914  WORKMEN'S  COMPENSATION   COMMISSION.  15 

beyond  the  point  which  has  now  been  reached  by  the  country  which  has  provided 
the  highest  scale  of  compensation,  for  if  the  objection  is  valid  as  to  the  proposed 
legislation  it  would  be  an  equally  valid  objection  to  any  increase  in  the  compen- 
sation proposed  for  the  country  which  now  provides  for  the  highest  scale.  The 
question,  in  my  opinion,  is  not  what  other  countries  have  done,  but  what  does 
justice  demand  should  be  done.  I  have  no  fear  that  if  the  bill  should  become  law 
it  will  handicap  the  manufacturers  of  this  Province  as  the  Association  appears  to' 
think  that  it  will,  or  that  it  will  divert  manufacturing  from  the  Province.  There 
has  been  in  force  for  some  years  in  the  adjoining  Province  of  Quebec  a  compen- 
sation law  which  imposes  upon  employers  greater  burdens  than  they  are  subjected 
to  by  the  law  of  this  Province,  and  yet  it  has  not  been  suggested  that  any  su'oh 
results  as  are  prophesied  by  the  Association  have  followed  from  the  enactment  of 
the  Quebec  law. 

In  order  that  it  may  be  seen  whether  the  division  of  the  burden  between  the 
employer  and  workman  is  unfair,  it  may  be  well  to  point  out  how  it  will  be 
divided  under  the  provisions  of  the  proposed  law.  The  workman  will  bear  (1) 
the  loss  of  all  his  wages  for  seven  days  if  his  disability  does  not  last  longer  than 
that,  (2)  the  pain  and  suffering  consequent  upon  his  injury,  (3)  his  outlay  for 
medical  or  surgical  treatment,  nursing  and  other  necessaries,  (4)  the  loss  of 
45  per  cent,  of  his  wages  while  his  disability  lasts;  and  if  his  injury  results  in  his 
being  maimed  or  disfigured  he  must  go  through  life  bearing  that  burden  also,  while 
all  that  the  employer  will  bear  will  be  the  payment  of  55  per  cent,  of  the  injured 
workman's  wages  while  the  disability  lasts. 

The  burden  which  the  workman  is  required  to  bear  he  cannot  shift  upon  the 
shoulders  of  any  one  else,  but  the  employer  may  and  no  doubt  will  shift  his  burden 
upon  the  shoulders  of  the  community,  or  if  he  has  any  difficulty  in  doing  that 
will  by  reducing  the  wages  of  his  workmen  compel  them   to  bear  part  of  it. 

It  is  contended  that  it  is  unfair  to  require  the  employer  to  pay  compensation 
during  the  lifetime  of  the  workman  because  in  many  cases  it  will  mean  that  the 
workman  will  receive  compensation  for  a  period  during  which  if  he  had  not  been 
injured  he  would  have  been  unable  to  earn  wages.  Xo  doubt  that  will  be  the 
result  in  some  cases,  but  on  the  other  hand  the  workman  loses  any  advantage  he 
would  have  derived  had  he  not  been  injured  from  an  increase  in  his  wages  owing 
to  an  improvement  in  his  position,  or  to  an  increase  of  his  earning  power,  or  to 
a  rise  in  wages  from  any  other  cause  because,  except  in  the  one  case  of  a  workman 
who  is  under  the  age  of  twenty-one  years  when  injured,  the  compensation  is  based 
on  the  wages  the  workman  was  earning  at  the  time  of  his  injury. 

It  must  also  be  borne  in  mind  that  the  workman  is  required,  as  the  price  of 
the  compensation  he  is  to  receive,  to  surrender  his  right  to  damages  under  the 
common  law,  if  his  injury  happens  under  circumstances  entitling  him  by  the 
common  law  to  recover  or,  if  he  would  be  entitled  to  recover  only  under  the 
Workmen's  Compensation  for  Injuries  Act,  his  right  to  the  like  damages  as  he 
would  be  entitled  to  at  common  law  limited,  however,  to  an  amount  not  exceeding 
three  years'  wages  or  $1,500,  whichever  is  the  larger  sum. 

According  to  the  testimony  of  Mr.  Wolfe  (page  141),  and  there  is' no  reason 
to  doubt  the  accuracy  of  his  statement,  in  Germany  no  less  than  84  per  cent,  of 
the  accidents  incapacitate  the  workmen  for  less   than  fourteen   weeks. 

The  nineteenth  report  of  the  Minister  of  Labour  of  France  shows  that  the 
number  of  declared  accidents  in  that  country  in  the  year  1910,  after  deducting 
those  which  occasioned  an  incapacity  of  four  days  or  less,  and  omitting  those 


16  FINAL  REPORT  OF  THE  COMMISSIONER.  No.  53 

which  happened  in  mines,  mining  and  quarries,  was  412,278,  and  that  of  these 
1,650,  or  a  little  more  than  one  third  of  one  per  cent.,  were  fatal;  5,452,  or  about 
one  and  one  third  per  cent.,  resulted  in  permanent  disability,  and  399,769,  or 
about  97  per  cent.,  resulted  in  temporary  incapacity  lasting  for  more  than  four 
days,  and  that  in  the  remaining  5,407  cases,  or  about  one  and  one  third  per  cent.,  the 
results  of  the  accidents  were  unknown. 

In  Great  Britain  the  duration  of  disability  in  the  cases  terminating  in  1908 
was  as  follows : 

Less   than   two   weeks    11.2  per  cent. 

From  two  to  three  weeks    27.3  per  cent. 

From  three  to  four  weeks 18.4  per  cent. 

From  four  to  thirteen  weeks   37.7  per  cent. 

From  thirteen  to  twenty-six  weeks   4.1  per  cent. 

Over  twenty-six   weeks    1.3  per  cent. 

(24th  Annual  Report  of  the  United  States  Commissioner  of  Labour,  Vol.  II, 
pp.  1,525-6). 

Similar  statistics  for  Ontario  are  not  available,  but  it  may,  I  think,  fairly 
be  assumed  that  the  great  bulk  of  the  accidents  for  which  compensation  would 
be  payable  under  the  proposed  law  will  incapacitate  the  workman  for  short 
periods — 84  per  cent,  probably  for  less  than  fourteen  weeks — and  that  the  fatal 
accidents  and  those  causing  permanent  disability,  total  and  partial,  will  be 
comparatively  few.  If  this  assumption  is  warranted  there  would  appear  to  be 
not  only  no  reasonable  ground  for  the  apprehension  of  the  Association  that  the 
employers  will  be  unduly  burdened  with  payments  for  compensation  continuing 
during  the  lives  of  permanently  injured  workmen,  but  it  is  certain  that  under 
the  proposed  law  as  to  the  vast  majority  of  accidents  in  every  case  in  whicb 
there  could  be  recovery  at  common  law  or  under  the  Workmen's  Compensation 
for  Injuries  Act,  the  workman  will  be  worse  off  than  he  is  at  present,  and  his 
loss  will  be  a  direct  gain  to  the  employer,  amounting  annually  to  a  very  large  sum. 

My  conclusion  is  that  for  all  these  reasons  there  is  no  valid  ground  for  the 
objections  of  the  Association  to  the  scale  of  compensation  which  I  have  proposed. 

I  have,  however,  upon  further  consideration  come  to  the  conclusion  that  as 
the  purpose  of  the  proposed  law  is  to  protect  the  wage  earner  there  is  no  reason 
wby  highly  paid  managers  and  superintendents  of  establishments,  to  which  Part  I 
is  applicable,  should  be  entitled  to  compensation  out  of  the  accident  fund  to  an 
amount  greater  than  the  highest  paid  wage  earner  would  be  entitled  to  receive, 
and  I  therefore  recommend  that  the  draft  bill  be  amended  by  adding  the  follow- 
ing to  sub-section   1   of  section  39: 

"But  not  so  as  to  exceed  in  any  case  the  rate  of  $2,000  per  annum." 
If  no  such  limit  is  prescribed  the  result  would  be  that  the  small  employer, 
in  the  case  of  an  accident  happening  in  another  establishment  to  a  highly  paid 
official,  would  be  unduly  burdened.  I  propose  $2,000  as  the  limit  because  that 
sum  is  probably  the  maximum  amount  earned  in  a  year  by  the  highest  paid 
wage  earner. 

The  only  remaining  provision  of  the  draft  bill  to  which  I  shall  refer  is  section 
68,  which  provides  for  a  contribution  by  the  Province  to  assist  in  defraying  the 
expenses  incurred  in  the  administration  of  the  act.     I  have  not  ventured  to  sug- 


1914  WORKMEN'S  COMPENSATION   COMMISSION.  i; 


gest  what  this  contribution  should  be  but,  in  my  judgment,  it  should  be  a  sub- 
stantial one.  The  effect  of  the  proposed  law  will  be  to  relieve  the  community 
from  the  burden  of  maintaining  injured  workmen  and  their  dependants  in  cases 
in  which  under  the  operation  of  the  existing  law  they  are  without  remedy,  and  by 
the  transfer  from  the  courts  to  the  Board  of  the  determination  of  claims  for  com- 
pensation, which  will  lessen  very  much  the  cost  of  the  administration  of  justice. 

There  is  one  matter  which  should  be  provided  I'm-  for  which  provision  has 
not  been  made  in  my  draft  bill.  No  provision  is  made  for  contribution  by  employers 
in  the  industries  mentioned  in  schedule  2  towards  defraying  the  cost  of  adminis- 
tration. This  was  an  oversight,  and  I  recommend  that  a  section  be  added  to  the 
bill  providing  that  "the  employers  in  industries  for  the  time  being  embraced  in 
schedule  2  shall  pay  the  Board  such  proportion  of  the  expenses  of  the  Board  in 
the  administration  of  this  part  as  the  Board  may  deem  just  and  determine,  and 
the  sum  payable  by  them  shall  be  apportioned  between  such  employers  and  assessed 
and  levied  upon  them  in  like  manner  as  in  the  case  of  assessments  for  contributions 
to  the  accident  fund,  and  all  the  provisions  of  this  part  as  to  assessments  shall  apply 
mutatis  mutandis  to  assessments  made  under  the  authority  of  this  section." 

It  is  the  purpose  of  my  draft  bill  to  empower  the  Board  in  determining  the 
proportions  of  the  contributions  to  be  made  to  the  accident  fund  by  employers  to 
have  regard  to  the  hazard  of  each  industry,  and  to  fix  the  proportions  of  the 
assessments  to  be  borne  by  the  employer  accordingly,  and  not  to  require  that  the 
proportions  for  each  class  or  sub-class  should  be  uniform;  and  also  to  permit  the 
Board,  if  in  its  opinion  the  character  of  any  class  of  industry  justifies  that  being 
done,  to  require  a  larger  contribution  to  the  reserve  fund  by  the  employers  in  any 
such  class  than  is  required  from  employers  in  other  classes. 

The  bill  as  drafted  will,  T  think,  accomplish  this  purpose,  but  if  any  doubt 
is  entertained  as  to  it,  the  bill  can  be  amended  by  the  addition  of  a  section  ex- 
pressly so  declaring. 

I  may  be  permitted  to  say,  in  conclusion,  as  the  United  States  Commissioners 
said  with  reference  to  the  bill  drafted  by  them,  that  T  submit  the  proposed  law 
"not  believing  that  it  is  the  most  perfect  measure  which  could  be  devised  nor  the 
last  word  which  can  be  said  upon  the  subject,  but  as  the  result  of  careful  investi- 
gation and  the  best  thought  of  the  Commission  and  as  constituting  at  least  a  step 
in  the  direction  of  a  just,  reasonable,  and  practicable  solution  of  the  problem  with 
which  it  deals." 

1  regret  that  some  of  its  provisions  do  not  commend  themselves  to  the  judg- 
ment of  the  Canadian  Manufacturers  Association,  and  on  that  account  I  have, 
since  my  last  interim  report,  again  carefully  and  anxiously  considered  those  which 
are  objected  to  and  the  objections  that  are  urged  against  them,  as  well  as  the  pro- 
visions of  the  Association's  alternative  proposition,  but  have  seen  no  reason  for 
doubting  the  correctness  of  the  conclusion  to  which  T  had  come,  the  results  of 
which  are  embodied  in  the  draft  bill. 

In  these  days  of  social  and  industrial  unrest  it  is,  in  my  judgment,  of  the 
gravest  importance  to  the  community  that  every  proved  injustice  to  any  section 
or  class  resulting  from  bad  or  unfair  laws  should  be  promptly  removed  by  the 
enactment  of  remedial  legislation  and  I  do  not  doubt  that  the  country  whose 
Legislature  is  quick  to  discern  and  prompt  to  remove  injustice  will  enjoy,  and 
that  deservedly,  the  blessing  of  industrial  peace  and  freedom  from  social  unrest. 
Half  measures  which  mitigate  but  do  not  remove  injustice  are,  in  my  judgment, 
to  be  avoided.        That  the  existing  law  inflicts   injustice   on   the  workingman  is 

2  w. 


18  FINAL  REPORT  OF  THE  COMMISSIONER.  No.  53 

admitted  by  all.  From  that  injustice  he  has  long  suffered,  and  it  would,  in  my 
judgment,  be  the  gravest  mistake  if  questions  as  to  the  scope  and  character  of  the 
proposed  remedial  legislation  were  to  be  determined,  not  by  a  consideration  of  what 
is  just  to  the  workingman,  but  of  what  is  the  least  he  can  be  put  off  with;  or  if 
the  Legislature  were  to  be  deterred  from  passing  a  law  designed  to  do  full  justice 
owing  to  groundless  fears  that  disaster  to  the  industries  of  the  Province  would 
follow  from  the  enactment  of  it. 

All  of  which  is  respectfully  submitted. 


W.  R.  Meredith, 

Commissioner. 


Dated  at  Osgoode  Hall,  Toronto, 

the  31st  day  of  October,  1913. 


SECOND  INTERIM  REPORT  ON 


Laws  Relating  to  the 
Liability   of   Employers 

WITH   DRAFT  OF 

An  Act  to  provide  for  Compensation  to  Work- 
men for  Injuries  sustained  and  Industrial 
Diseases  contracted  in  the  course  of  their 
employment. 

By 

THE  HON.  SIR  WILLIAM  RALPH  MEREDITH,  C.J.O., 

COMMISSIONER. 


PRINTED  BY  ORDER  OF 

THE  LEGISLATIVE  ASSEMBLY  OF  ONTARIO 


TORONTO : 
Printed  and  Publishedby  L.  K.  CAMERON,  Printer  to  the  Ki  lg's  Most  Excellent  Majesty 

19  13. 


5* 


To  the  Honourable 

Sir  John  Morison  Gibson,  K.C.M.G-., 

Lieutenant-Governor  of  the  Province  of  Ontario,  etc.,  etc.,  etc. 

The  undersigned  has  the  honour  to  submit  a  further  interim 
report  on  the  subject  of  compensation  to  workmen  for  injuries 
sustained  in  the  course  of  their  employment. 

The  undersigned  has  carefully  considered  the  matters  into 
which  he  was  by  Your  Honour's  Commission  appointed  to 
inquire,  and  has  embodied  his  conclusions  in  a  draft  Bill  which 
is  submitted  herewith. 

The  blanks  for  the  percentage  of  wages  which  appear  in  the 
draft  Bill  should  in  the  opinion  of  the  undersigned  be  filled  in 
with  the  figures  55. 

The  undersigned  has  not  yet  been  able  to  prepare  his  final 
report,  but  hopes  to  transmit  it  with  the  documentary  and  other 
evidence  taken  and  a  statement  of  his  reasons  for  the  con- 
clusions at  which  he  has  arrived,  during  the  present  month. 

All  of  which  is  respectfully  submitted, 

W.  E.  MEREDITH, 

Commissioner. 

Osgoode  Hall, 

Toronto,  April  1st,  1913. 


[21] 


BILL 


An  Act  to  provide  for  Compensation  to  Work- 
men for  Injuries  sustained  and  Industrial 
Diseases  contracted  in  the  course  of  their 
employment. 


HIS  MAJESTY,  by  and  with  the  advice  and  consent  of 
the  Legislative  Assembly  of  the  Province  of  Ontario, 
enacts  as  follows: — 


PRELIMINARY. 


1  This  Act  may  be  cited  as  The  Workmen's  Compensa-  Short  title. 
Hon  Act. 


(1)    In   this  Act: Interpreta- 

v    '  tion 

(a)   "  Accident''  shall  include  a  wilful  and  an  inten-  "Accident." 
tional  act,  not  being  the  act  of  the  workman  and 
a  fortuitous  event  occasioned  by  a  physical  or 
natural  cause; 


(&)    "  Accident  Fund  "  shall  mean  the  fund  provided  f^^ent 
for   the   payment   of   compensation   under   this 
Act : 


(c)    "  Board  "    shall    mean   Workmen's    Compensation  "Board." 
Board ; 


(d)   "  Construction  "  shall  include  re-construction,  re-  "Construc- 
pair,  alteration  and  demolition ; 


(e)    "  Dependants  "  shall  mean  such  of  the  members  of  antsP"nd" 
the  family  of  a  workman  as  were  wholly  or  partly 
dependent  upon  his  earnings  at  the  time  of  his 
death  or  who  but  for  the  incapacity  due  to  the 
accident  would  have  been  so  dependent; 

23 


2± 


SECOND  INTERIM  REPORT  OF  THE 


No.  53 


"Employer.1 


"Employ- 
ment." 


"Industrial 
disease." 


'Industry.' 


"Invalid." 


(/)  "  Employer  "  shall  include  every  person  having  in 
his  service  under  a  contract  of  hiring  or  appren- 
ticeship, written  or  oral,  express  or  implied,  any 
person  engaged  in  any  work  in  or  about  any 
establishment,  undertaking,  business  or  employ- 
ment, and  where  the  services  of  a  workman  are 
temporarily  let  or  hired  to  another  person  by  the 
person  with  whom  the  workman  has  entered  into 
such  a  contract  the  latter  shall  be  deemed  to 
continue  to  be  the  employer  of  the  workman 
whilst  he  is  working  for  that  other  person; 

(g)  "  Employment "  shall  include  employment  in  any 
part,  branch  or  department  of  an  establishment, 
undertaking  or  business; 

(h)  "  Industrial  disease  "  shall  mean  any  of  the  di- 
seases mentioned  in  Schedule  3,  and  any  other 
disease  which  by  the  Regulations  is  declared  to 
be  an  industrial  disease; 

(i)  "  Industry  "  shall  include  establishment,  undertak- 
ing, trade  and  business ; 

(/)  "  Invalid  "  shall  mean  physically  or  mentally  in- 
capable of  earning; 


"Manufac- 
turing:." 


(h)  "  Manufacturing "  shall  include  making,  prepar- 
ing, altering,  repairing,  ornamenting,  printing, 
finishing,  packing,  assembling  the  parts  of  and 
adapting  for  use  or  sale  any  article  or  com- 
modity ; 


"Medical 
referee." 


(1)   "  Medical  Referee  "  shall  mean  medical  referee  ap- 
pointed by  the  Board; 


"Member 
of  the 

family." 


(m) 


"  Member  of  the  Family  "  shall  mean  and  include 
wife,  husband,  father,  mother,  grandfather, 
grandmother,  stepfather,  stepmother,  son,  daugh- 
ter, grandson,  granddaughter,  stepson,  step- 
daughter, brother,  sister,  half-brother  and  half- 
sister,  and  a  person  standing  in  loco  parentis  to 
the  workman,  whether  related  to  him  by  con- 
sanguinity or  not  so  related,  and  where  the  work- 
man is  the  parent  or  grandparent  of  an  ille- 
gitimate child,  shall  include  such  child,  and 
whore  the  workman  is  an  illegitimate  child  shall 
include  his  parents  and  grandparents; 


1914       WORKMEN'S  COMPENSATION    COMMISSION.  25 


(n)   "  Outworker  "  shall  mean  a  person  to  whom  ar-  "Out- 

v     y  .  .  -i  i  worker." 

ticles  or  materials  are  given  out  to  be  made  up, 
cleaned,  washed,  altered,  ornamented,  finished, 
repaired,  or  adapted  for  sale  in  his  own  home 
or  on  other  premises  not  under  the  control  or 
management  of  the  person  who  gave  out  the  ar- 
ticles or  materials; 

(o)    "  Regulations  "    shall    mean   regulations  made  by  "Resu,la~ 

v    J  ~  °  .  tions. 

the  Board  under  the  authority  of  this  Act; 

(p)  "  Workman "  shall  include  a  person  who  has  "Workman." 
entered  into  or  works  under  a  contract  of  ser- 
vice or  apprenticeship,  written  or  oral,  express 
or  implied,  whether  by  way  of  manual  labour, 
clerical  work,  or  otherwise,  but  shall  not  include 
an  out-worker. 

(2)   Words  in  the  singular  number  interpreted  by  sub-  tatiorTof 
section  1  shall  have  a  corresponding  meaning  when  used  in  ws0e^sin 

the  plural.  number. 


(3)    The   exercise   and   performance   of   the   powers   and  corpora-8,1 

tions,  < 
and  sch 
boards. 


duties  of- tions>  etc- 

mines,  uj-.  and  school 


(a)  a  municipal  corporation  ; 

(b)  a  public  utilities  commission  ; 

(c)  any  other  commission  having  the  management  and 

conduct  of  any  work  or  service  owned  by  or  oper- 
ated for  a  municipal  corporation ; 

(d)  the  board  of  trustees  of  a  police  village ;  and 

(e)  a  school  board, 

shall  for  the  purposes  of  this  Act  be  deemed  as  the  trade  or 
business  of  the  corporation,  commission,  board  of  trustees  or 
school  board. 


26 


SECOXD  IXTEPJM  PEPOPT  OF  THE 


Xo.  53 


PART  I. 


COMPENSATION. 


Compensa- 
tion to 
workmen. 


Exceptions. 


3. — (1)  Where  in  any  employment,  personal  injury  by 
accident  arising  out  of  and  in  the  course  of  the  employment 
is  caused  to  a  workman  his  employer  shall  be  liable  to  pro- 
vide or  to  pay  compensation  in  the  manner  and  to  the  extent 
hereinafter  mentioned  except  where  the  injury: — 

(a)  does  not  disable  the  workman  for  the  period  of  at 

least  seven  days  from  earning  full  wages  at  the 
work  at  which  he  was  employed; 

(b)  is  attributable  solely  to  the  serious  and  wilful  mis- 

conduct of  the  workman  unless  the  injury  results 
in  death  or  serious  disablement. 


Presump- 
tions. 


Compensa- 
tion  to 
date   from 
iisability. 


Section 
not  to 
apply    to 
casual  em- 
ployment. 


Employ- 
ers indi- 
vidually 
liable. 

Employers 
liable   to 
contri- 
bute   to 
the  acci- 
dent 
fund. 


(2)  Where  the  accident  arose  out  of  the  employment, 
unless  the  contrary  is  shown,  it  shall  be  presumed  that  it 
occurred  in  the  course  of  the  employment,  and  where  the 
accident  occurred  in  the  course  of  the  employment,  unless 
the  contrary  is  shown,  it  shall  be  presumed  that  it  arose  out 
of  the  employment. 

(3)  Where  compensation  for  disability  is  payable  it 
shall  be  computed  and  be  payable  from  the  date  of  the  dis- 
ability. 

(4)  This  section  shall  not  apply  to  a  person  whose  employ- 
ment is  of  a  casual  nature  and  who  is  employed  otherwise 
than  for  the  purposes  of  the  employer's  trade  or  business. 

4.  Employers  in  the  industries  mentioned  in  Schedule  2 
shall  be  liable  individually  to  pay  the  compensation. 

5.  Employers  in  industries  for  the  time  being  embraced  in 
Schedule  1,  shall  be  liable  to  contribute  to  the  accident  fund 
as  hereinafter  provided,  but  shall  not  be  liable  individually 
to  pay  the  compensation. 


Accident 
happening 
out  of 
Ontario. 


6. — (1)  Where  the  place  or  chief  place  of  business  of  an 
employer  is  situate  in  Ontario  and  an  accident  happens  while 
the  workman  is  employed  elsewhere  than  in  Ontario  which 
would  entitle  him  or  his  dependants  to  compensation  under 
this  Part  if  it  had  happened  in  Ontario  the  workman  and  his 
dependants  shall  be  entitled  to  compensation  under  this  Part 
if  the  usual  place  of  employment  of  the  workman  is  in  On- 
tario and  his  employment  out  of  Ontario  has  lasted  less  than 
six  months. 


1914       WOKKMEN'S  COMPENSATION   COMMISSION.  27 

(2)  Except  as  provided  by  subsection  1  no  compensation 
shall  be  payable  under  this  Part  where  the  accident  to  the 
workman  happens  out  of  Ontario  unless  it  happens  on  a 
steamboat,  ship  or  vessel,  or  on  a  railway,  and  the  nature 
of  the  employment  is  such  that  in  the  course  of  the  work 
or  service  which  the  workman  performs  it  is  required  to  bo 
performed  both  within  and  without  Ontario. 

7. —  (1)   Where  by  the  law  of  the  country  or  place  in  where  com- 
which  the  accident  happens  the  workman  or  his  dependants  payable 
are  entitled  to  compensation  in  respect  of  it  they  shall  be  foreign  ° 
bound  within  three  months  after  the  happening  of  the  acci-  workman 
dent  or  in  case  it  results  in  death  within  three  months  after  to  elect 
the   death  to  elect  whether  they  will   claim   compensation 
under  the  law  of  such  country  or  place  or  under  this  Part 
and  to  give  notice  of  such  election,  and  if  such  election  is 
not  made  and  notice  given  it  shall  be  presumed  that  they 
have  elected  not  to  claim  compensation  under  this  Part. 

(2)   Notice  of  the  election,  where  the  compensation  under  How 

election 

this  Part  is  payable  by  the  employer  individually,  shall  be  to  be 
given  to  the  employer,  and  where  the  compensation  is  pay-  ma  ' 
able  out  of  the  accident  fund  to  the  Board  and  shall  be 
given  in  both  cases  within  three  months  after  the  happening 
of  the  accident. 

S. — (1)  Where  a  dependant  is  not  a  resident  of  Ontario  nonresident 
he  shall  not  be  entitled  to  compensation  unless  by  the  law  in  °ntario- 
of  the  place  or  country  in  which  he  resides  the  dependant* 
of  a  workman  to  whom  an  accident  happens  in  such  place 
or  country  if  resident  in  Ontario  would  be  entitled  to  com- 
pensation and  where  such  dependants  would  be  entitled  to 
compensation  under  such  law  the  compensation  to  which  the 
non-resident  dependant  shall  be  entitled  under  this  Part  shall 
not  be  greater  than  the  compensation  payable  in  the  like 
case  under  that  law. 

(2)   Notwithstanding  the  provisions  of  subsection  1  the  Exception. 
Board  may  make  such  allowance  in  lieu  of  compensation  to 
any  such  non-resident  dependant  as  may  be  deemed  proper 
and  may  pay  the  same  out  of  the  accident  fund. 

9 — -(1)   Where  an  accident  happens  to  a  workman  in  the  where  work- 

<•  i  •  i  j.  j  i  man  entitled 

course  of  his  employment  under  such  circumstances  as  en-  to  action 
title  him  or  his  dependants  to  an  action  against  some  person  pfrson* 
other  than  his  employer  the  workman  or  his  dependants  if  employer" 
entitled  to  compensation  under  this  Part  may  claim  such  bebrounhty 
compensation  or  may  bring  such  action. 


28 


SECOND  INTERIM  EEPOET  OF  THE 


No.  53 


Workman 
entitled   to 
difference 
between 
compensa- 
tion under 
Act  and 
amount 
collected. 


(2)  If  an  action  is  brought  and  less  is  recovered  and 
collected  than  the  amount  of  the  compensation  to  which 
the  workman  or  his  dependants  are  entitled  under  this  Part 
the  difference  between  the  amount  recovered  and  collected 
and  the  amount  of  such  compensation  shall  be  payable  as 
compensation  to  such  workman  or  his  dependants. 


Subrogation 
of   employ- 
er or 
Board 
to  rights  of 
workman. 


(3)  If  the  workman  or  his  dependants  elect  to  claim 
compensation  under  this  Part  the  employer,  if  he  is  indi- 
vidually liable  to  pay  it,  and  the  Board  if  the  compensation 
is  payable  out  of  the  accident  fund  shall  be  subrogated  to 
the  rights  of  the  workman  or  his  dependants  and  may 
maintain  an  action  in  his  or  their  names  against  the  per- 
son against  whom  the  action  lies  and  any  sum  recovered  from 
him  by  the  Board  shall  form  part  of  the  accident  fund. 


How 
Election 
to  be 
made. 


(4)  The  election  shall  be  made  and  notice  of  it  shall  be 
given  within  the  time  and  in  the  manner  provided  by  sub- 
section 2  of  section  7. 


Sub -con- 
tractors. 


10. — (1)  Where  the  compensation  is  payable  by  the  em- 
ployer individually  and  a  person,  in  this  section  referred  to 
as  the  principal,  in  the  course  of  or  for  the  purposes  of  his 
trade  or  business  contracts  with  any  other  person,  in  this 
section  referred  to  as  the  contractor,  for  the  execution  by  or 
under  the  contractor  of  the  whole  or  any  part  of  any  work 
undertaken  by  the  principal,  the  principal  shall  be  liable  to 
pay  to  any  workman  employed  in  the  execution  of  the  work 
the  compensation  which  he  would  have  been  liable  to  pay  if 
that  workman  had  been  immediately  employed  by  him. 


(2)  Where  compensation  is  claimed  from  the  principal  in 
this  Part  reference  to  the  principal  shall  be  substituted  for 
reference  to  the  employer,  except  that  the  amount  of  the 
compensation  shall  be  calculated  with  reference  to  the  earn- 
ings of  the  workman  under  the  employer  by  whom  he  is 
immediately  employed. 

(3)  Where  the  principal  is  liable  to  pay  compensation 
under  this  section  he  shall  be  entitled  to  be  indemnified  by 
any  person  who  would  have  been  liable  to  pay  compensation 
to  the  workman  independently  of  this  section  and  all  ques- 
tions as  to  the  right  to  and  the  amount  of  any  such  indemnity 
shall  be  determined  by  the  Board. 


(4)  Nothing  in  this  section  shall  prevent  a  workman 
claiming  compensation  under  this  Part  from  the  contractor 
instead  of  the  principal. 


1914        WOKKMEN'S  COMPENSATION  COMMISSION.  29 


(5)  This  section  shall  not  apply  where  the  accident  hap- 
pens elsewhere  than  on  or  in  or  about  premises  on  which  the 
principal  has  undertaken  to  execute  the  work  or  which  are 
otherwise  under  his  control  or  management. 

11.  Where  compensation  is  payable  out  of  the  accident  Member  of 
fund,  a  member  of  the  family  of  an  employer  shall  not  employer 
be  entitled  to  compensation  unless  he  was  at  the  time  of  ^rkman.as 
the  accident  carried  on  the  pay  roll  of  the  employer  and  his 

wages  were  included  in  the  then  last  statement  furnished 
to  the  Board  under  section  76  nor  for  the  purpose  of  de- 
termining the  compensation  shall  his  earnings  be  taken  to 
be  more  than  the  amount  of  his  wages,  as  shown  by  such  pay 
roll  and  statement. 

12.  Where  compensation  is  payable  out  of  the  accident  Employer 

j>        -I  i  i»  •     i  i  •  nj.1  carried  on 

fund  an  employer  who  is  carried  on  his  pay-roll  at  a  salary  payroll  enti- 
or  wages  which  the  Board  deems  reasonable  shall  if  such  pensation"" 
salary  or  wages  were  included  in  the  then  last  statement 
furnished  to  the  Board  under  section  76  be  deemed  to  be 
a  workman  within  the  meaning  of  this  Act  and  shall  be 
entitled  to  compensation  accordingly,  but  for  the  purpose  of 
determining  the  compensation  his  earnings  shall  not  be 
taken  to  be  more  than  the  amount  of  his  salary  or  wages  as 
shown  by  such  pay  roll  and  statement. 

13.  N"o  action  shall  lie  for  the  recovery  of  the  compen-  No  action  to 
sation  whether  it  is  payable  by  the  employer  individually  ^  Recover* 
or  out  of  the  accident  fund,  but  all  claims  for  compensation  compensa- 
shall  be  heard  and  determined  by  the  Board. 

14.  Tf  a  workman  receiving  a  weekly  or  other  periodical  workman 
payment  ceases  to  reside  in  Ontario  he  shall  not  thereafter  compensa- 
be  entitled  to  receive  any  such  payment  unless  a  medical  ingnoutSof" 
referee  certifies  that  the  incapacity  resulting  from  the  injury  °ntano- 
is  likely  to  be  of  a  permanent  nature  and  if  a  medical  referee 

so  certifies  the  workman  shall  be  entitled  quarterly  to  the 
amount  of  the  weekly  or  other  periodical  payment  accruing 
due  if  he  proves  in  such  manner  as  may  be  prescribed  by 
the  Regulations  his  identity  and  the  continuance  of  the  in- 
capacity in  respect  of  which  the  same  is  payable. 

15.  The  right  to  compensation  provided  for  by  this  Part  compensa- 
shall  be  in  lieu  of  all  rights  and  rights  of  action,  statutory  in  Heu  of 
or  otherwise,  to  which  a  workman  or  his   dependants  are  ana  lights 
or  may  be  entitled  against  the  employer  of  such  workman  against0" 
for  or  by  reason  of  any  accident  which  happens  to  him  while  employer, 
in  the  employment  of  such  employer,  and  after  the 

day  of  191      ,   and   no   action    in   respect   thereof 

shall  thereafter  lie. 


30 


SECOND  INTEK1M  PEPOKT  OF  THE 


No.  53 


Right  to 
compensa- 
tion may 
not  be 
waived. 


Agreement 
as  to 

compensa- 
tion not 
valid 

unless  ap- 
proved by 
the 
Board. 


Exception. 


Deduction 
not  to 
be  made 
from 
wages. 


16.  It  shall  not  be  competent  for  a  workman  to  agree 
with  his  employer  to  waive  or  to  forego  any  of  the  benefits 
to  which  he  or  his  dependants  are  or  may  become  entitled 
under  this  Part  and  every  agreement  to  that  end  shall  be 
absolutely  void. 

17. — (1)  Where  the  compensation  is  payable  by  an  em- 
ployer individually  no  agreement  between  a  workman  or 
dependant  and  the  employer  for  fixing  the  amount  of  the 
compensation  or  by  which  the  workman  or  dependant  accepts 
or  agrees  to  accept  a  stipulated  sum  in  lieu  or  in  satisfaction 
of  it  shall  be  binding  on  the  workman  or  dependant  unless  it 
is  approved  by  the  Board. 

(2)  Subsection  1  shall  not  apply  to  compensation  for  tem- 
porary disability  lasting  for  less  than  four  weeks. 

18. — (1)  It  shall  not  be  lawful  for  an  employer,  either 
directly  or  indirectly,  to  deduct  from  the  wages  of  any  of 
his  workmen  any  part  of  any  sum  which  the  employer  is,  or 
may  become  liable  to  pay  to  the  workman  as  compensation 
under  this  Part  or  to  require  or  to  permit  any  of  his  work- 
men to  contribute  in  any  manner  towards  indemnifying  the 
employer  against  any  liability  which  he  has  incurred  or  may 
incur  under  this  Part. 


Penalty. 


(2)  Every  person  who  contravenes  any  of  the  provisions 
of  subsection  1  shall  for  every  such  contravention  incur  a 
penalty  not  exceeding  $50  and  shall  also  be  liable  to  repay 
to  the  workman  any  sum  which  has  been  so  deducted  from 
his  wages  or  which  he  has  been  required  or  permitted  to  pay 
in  contravention  of  subsection  1. 


Compensa- 
tion not 
assignable 
or  liable  to 
attachment. 


Notice  of 
accident  to 
be  given. 


19.  Unless  with  the  approval  of  the  Board  no  sum  pay- 
able as  compensation  or  by  way  of  commutation  of  any 
weekly  or  other  periodical  payment  in  respect  of  it  shall  be 
capable  of  being  assigned,  charged  or  attached,  nor  shall 
it  pass  by  operation  of  law  except  to  a  personal  representa- 
tive nor  shall  any  claim  be  set  off  against  it. 

20. —  (1)  Subject  to  subsection  5  compensation  shall  not 
be  payable  unless  notice  of  the  accident  is  given  as  soon  as 
practicable  after  the  happening  of  it  and  before  the  work- 
man has  voluntarily  left  the  employment  in  which  he  was 
injured  and  unless  the  claim  for  compensation  is  made  with- 
in six  months  from  the  happening  of  the  accident  or  in  case 
of  death  within  six  months  from  the  time  of  death. 


Nature  of 
notice. 


(2)   The  notice  shall  give  the  name  and  address  of  the 
workman  and  shall  bo  sufficient  if  it  states  in  ordinary  Ian- 


1914       WOKKMEN'S  COMPENSATION   COMMISSION.  31 


guage  the  cause  of  the  injury  and  where  the  accident  hap- 
pened. 

(3)  The  notice  may  be  served  by  delivering  it  at  or  send-  service  of 
ing  it  by  registered  post  addressed  to  the  place  of  business 

or  the  residence  of  the  employer,  or  where  the  employer  is  a 
body  of  persons,  corporate  or  unincorporate,  by  delivering 
it  at  or  sending  it  by  registered  post  addressed  to  the  em- 
ployer at  the  office  or  if  there  are  more  offices  than  one  at 
any  of  the  offices  of  such  body  of  persons. 

(4)  Where  the  compensation  is  payable  out  of  the  acci- 
dent fund  the  notice  shall  also  be  given  to  the  Board  by 
delivering  it  to  or  at  the  office  of  the  Secretary  or  by  sending 
it  to  him  by  registered  post  addressed  to  his  office. 

(5)  Failure  to  give  the  prescribed  notice  or  any  defect  Failure  to 
or  inaccuracy  in  a  notice  shall  not  bar  the  right  to  compen-  feet '  irT  no*-" 
sation  if  in  the  opinion  of  the  Board  the  employer  was  not  afftct°right 
prejudiced  thereby  or  where  the  compensation  is  payable  pension 
out  of  the  accident  fund  if  the  Board  is  of  opinion  that  the  in  certain 

J.  P9  9PR. 

claim  for  compensation  is  a  just  one  and  ought  to  be  allowed. 


cases. 


21. — (1)    A  workman  who  claims   compensation,   or  to  workman  to 
whom  compensation  is  payable  under  this  Part  shall  if  so  IxarnlnaUon. 
required  by  his  employer  submit  himself  for  examination 
by  a  duly  qualified  medical  practitioner  provided  and  paid 
for  by  the  employer  and  shall  if  so  required  by  the  Board 
submit  himself  for  examination  by  a  medical  referee. 

(2)   A  workman  shall  not  be  required  at  the  request  of  in  accord- 
his  employer  to  submit  himself  for  examination  otherwise  regulations. 
than  in  accordance  with  the  Regulations. 

22. — (1)   Where   a   workman   has   upon   the   request   of  lri  case  of 
his   employer    submitted   himself   for   examination,    or   has  between 
been   examined   by   a    duly   qualified   medical   practitioner  a^nine?s.f 
selected  by  himself,  and  a  copy  of  the  report  of  the  medical  ence  may" 
practitioner  as   to   the  workman's  condition  has  been  fur-  me™caie  t0 
nished  in  the  former  ^ase  by  the  employer  to  the  workman  referee, 
and  in  the  latter  case  by  the  workman  to  the  employer  the 
Board  may,  on  application  of  either  of  them,  refer  the  matter 
to  a  medical  referee. 

(2)    The  medical  referee  to  whom   a   reference  is  made  of  medical 
under  the  next  preceding  subsection  or  who  has  examined  kenfaeiree 
the  workman  by  the  direction  of  the  Board  under  subsection 
1  of  section  21,  shall  certify  to  the  Board  as  to  the  condition 
of  the  workman  and  his  fitness  for  employment,  specifying 


32 


SECOND  INTERIM  REPOET  OF  THE 


No.  53 


where  necessary  the  kind  of  employment  and  his ,  certificate 
shall  be  conclusive  as  to  the  matters  certified. 

submit  to  (3)   If  a  workman  does  not  submit  himself  for  examina- 

praobSruc°t-  ^on  when  required  to  do  so  as  provided  by  subsection  1  of 
ing  it.  section  21,  or  on  being  required  to  do  so  dot     not  submit 

himself  for  examination  to  a  medical  referee  under 
that  subsection  or  under  subsection  1  of  this  section, 
or  in  any  way  obstructs  any  examination,  his  right  to  com- 
pensation or  if  he  is  in  receipt  of  a  weekly  or  other  periodical 
payment  his  right  to  it  shall  be  suspended  until  such  ex- 
amination has  taken  place. 


Review 
of  com- 
pensation. 


23.  Any  weekly  or  other  periodical  payment  to  a  work- 
man may  be  reviewed  at  the  request  of  the  employer  or  of 
the  workman,  if  the  compensation  is  payable  by  the  employer 
individually,  or,  if  the  compensation  is  payable  out  of  the 
accident  fund,  of  the  Board's  own  motion  or  at  the  request 
of  the  workman  and  on  such  review  the  Board  .may  .put  an 
end  to  or  diminish  or  may  increase  such  payment  to  a  sum 
not  beyond  the  maximum  hereinafter  prescribed. 


ofCcom-e  24.  Where  the  workman  was  at  the  date  of  the  accident 

Fo'woVkrnan  under  twenty-one  years  of  age  and  the  review  takes  place 
under  2i.       more  than  six  months  after  the  accident  the  amount  of  a 

weekly  payment  may  be  increased  to  any  sum  not  exceeding 
per  cent,  of  the  weekly  sum  which  if  he  had  remained 

uninjured  he  would  probably  have  been  earning  at  the  date 

of  the  review. 


Commuta- 
tion of 
payments 
for  lump 
sum. 


Lump 
sum  to  be 
paid  to 
Board. 

Applica- 
tion  of 
lump 
sum. 


25. —  (1)  Where  the  compensation  is  payable  by  an  em- 
ployer individually,  the  employer  may,  with  the  consent  of 
the  workman  or  dependant  to  whom  it  is  payable  and  with 
the  approval  of  the  Board,  but  not  otherwise,  and  where  it 
is  payable  out  of  the  accident  fund  the  Board  may  commute 
the  weekly  or  other  periodical  payments  payable  to  a  work- 
man or  a  dependant  for  a  lump  sum. 

(2)  "Where  the  lump  sum  is  payable  by  the  employer 
individually  it  shall  be  paid  to  the  Board. 

(3)  The  lump  sum  may  be: — 

(a)  applied   in  such  manner  as   the  workman  or  de- 

pendant may  direct; 

(b)  paid  to  the  workman  or  dependant; 

(r.)   invested   by  the  Board   and   applied    to  meet  the 
future  payments  as  they  become  due; 


1914        WOKKMEN'S  COMPENSATION  COMMISSION. 


(d)  raid  to  trustees  to  be  used  and  employed  upon  and 

subject  to  such  trusts  and  for  the  benefit  of  such 
persons  as,  in  case  it  is  payable  by  the  employer 
individually,  the  workman  or  dependant  directs 
and  the  Board  approves,  or,  if  payable  out  of 
ie  accident  fund,  as  may  be  desired  by  the 
workman  or  dependant  and  approved  by  the 
Board ; 

(e)  applied  partly   in  one   and   partly    in    another  or 

others  of  the  modes  mentioned  in  clauses   (a), 
(6),  (c)  and  (d), 

as  the  Board  may  determine. 

26. —  (1)   Where  a  weekly  or  other  periodical  payment  Commuta- 
is  payable  by  the  employer  individually  and  has  been  con-  01f°Iweekiy 
tinued  for  not  less  than  six  months,  the  Board  may  on  the  Payments- 
application  of  the  employer  allow  the  liability  therefor,  to  be 
commuted  by  the  payment  of  a  lump  sum  of  such  an  amount 
as,  if  the  incapacity  is  permanent,  would  purchase  an  im- 
mediate annuity  from  a  life  insurance  company  approved 
by  the  Board,  equal  to  seventy-five  per  cent,  of  the  annual 
value  of  the  weekly  or  other  periodical  payment,  and  in  other 
cases  of  such  an  amount  as  the  Board  may  deem  reasonable. 

(2)    The  sum  for  which  a  payment  may  be  commuted  ^tp1011 
under  subsection  1,  shall  be  paid  to  the  Board  and  shall  be  sum 
dealt  with  in  the  manner  provided  by  section  25. 

27. —  (1)   Where  an  employer  insured  by  a  contract  of  company 
insurance  of  an  insurance  company  or  any  other  underwriter  commute 
is  individually  liable  to  make  a  weekly  or  other  periodical  blither 
payment  to  a  workman  or  his  dependants  and  the  payment  payment11 
has  continued  for  more  than  six  months  the  liability  shall, 
if   the   Board   so    directs   before   the   expiration   of   twelve 
months  from  the  commencement  of  the  incapacity  of  the 
workman  or  his  death,  if  the  accident  resulted  in  death,  be 
commuted  by  the  payment  of  a  lump  sum  in  accordance 
with  the  next  preceding  section,  and  the  company  or  under- 
writer shall  pay  the  lump  sum  to  the  Board,  and  it  shall  be 
dealt  with  in  the  manner  provided  by  section  25. 

(2)   This  section  shall  not  apply  to  a  contract  of  insur- 
ance entered  into  before  the  passing  of  this  Act. 

28.  The   Board    may   require    an   employer   who    is    in-  require 
dividually   liable   to   pay   the   compensation   to   pay   to   the  to  pay  sum 
Board  a  sum  sufficient  to  commute  in  accordance  with  sec-  to  commute, 
tion  26,  any  weeklv  or  other  periodical  payments  which  are 
3  w. 


34 


SECOND  INTERIM  EEPORT  OP  THE 


No.  53 


payable  to  the  workman  during  his  life  or  to  his  widow  dur- 
ing her  widowhood  and  such  sum  shall  be  applied  by  the 
Board  in  the  payment  of  such  weekly  or  other  periodical 
payments  as  they  from  time  to  time  become  payable,  but 
if  the  sum  paid  to  the  Board  is  insufficient  to  meet  the 
whole  of  such  weekly  or  other  periodical  payments  the  em- 
ployer shall  nevertheless  be  liable  to  make  such  of  them  as 
fall  due  after  the  sum  paid  to  the  Board  is  exhausted. 


?equiremay  ^*  The  Board  may  require  an  employer  who  is  indi- 
fn^ur°yhisto  ^dually  liable  to  pay  the  compensation  to  insure  his  work- 
workmen,  men  and  keep  them  insured  against  accidents  in  respect 
of  which  he  may  become  liable  to  pay  compensation  in  a 
company  approved  by  the  Board  for  such  amount  as  the 
Board  may  direct  and  in  default  of  his  doing  so  the  Board 
may  cause  them  to  be  so  insured  and  may  recover  the  ex- 
pense incurred  in  so  doing  from  the  employer. 


Where  em- 
ployer in- 
sured Board 
may  require 
insurer  to 
pay  amount 
payable   to 
employer 
directly  to 
injured 
workman. 


30. —  (1)  Where  an  employer  who  is  individually  liable 
to  pay  the  compensation  is  insured  against  his  liability  to 
pay  compensation,  the  Board  may  require  the  insurance 
company  or  other  underwriter  to  pay  the  sum  which  under 
the  contract  of  insurance  such  company  or  underwriter  would 
be  liable  to  pay  to  the  employer  in  respect  of  an  accident  to 
a  workman  who  becomes,  or  whose  dependants  become  en- 
titled to  compensation  under  this  Part,  directly  to  the  Board 
in  discharge  or  in  discharge  pro  tanto  of  the  compensation 
to  which  such  workman  or  his  dependants  are  found  to  be 
entitled. 


Notice  to 
be  given  to 
insurer. 


(2)  In  any  case  to  which  subsection  1  applies  where  a 
claim  for  compensation  is  made  notice  of  the  claim  shall  be 
given  to  the  insurance  company  or  other  underwriter  and 
to  the  employer  and  the  Board  shall  determine  not  only  the 
question  of  the  right  of  the  workman  or  dependant  to  com- 
pensation but  also  the  question  whether  the  whole  or  any 
part  of  it  should  be  paid  directly  by  the  insurance  company 
or  other  underwriter  as  provided  by  subsection  1. 


Sect.   25 
to  apply. 


(3)    Section  25  shall  apply  to  the  compensation  payable 
to  the  Board  under  subsection  1. 


In  case  of 
permanent 
disability 
employer 
may  be 
required   to 
pay  capital 
■um, 


31. — (1)  Where  the  accident  causes  permanent  dis- 
ability, either  total  or  partial  or  the  death  of  the  workman' 
and  the  compensation  is  payable  by  the  employer  individ- 
ually the  Board  may  require  the  employer  to  pay  to  the 
Board  such  sum  as  in  its  opinion  will  be  sufficient  with  the 
interest  thereon  if  invested  so  as  to  earn  interest  at  the 
rate  of  5  per  cent,  per  annum  to  meet  the  future  payments 
to    be    made    to    the    workman    or    his  dependants,  and  such 


1914       WOEKMEN'S  COMPENSATION   COMMISSION.  35 

sum  when  paid  to  the  Board  shall  be  invested  by  it  and 
shall  form  a  fund  to  meet  such  future  payments. 

(2)   The   Board,    instead   of   requiring   the   employer    to  >r  to  give 

^     '  security   for 

make  the  payment  provided  for  by  subsection  1,  may  re-  payment 
quire  him  to  give  such  security  as  the  Board  may   deem  pensation 
sufficient  for  the  future  payments. 

32.   Where  a  right  to  compensation  is  suspended  under  compensa- 
the  provisions  of  this  Part  no  compensation  shall  be  payable  payable 

£     -  .     i      £  .  during 

in  respect  ol  the  period  ol  suspension.  suspension. 

SCALE    OF     COMPENSATION. 


case 


33. —  (1)   Where  death  results  from  an  injury  the  amount  £°™?nnca< 
of  the  compensation  shall  be : —  of  death 

(a)  The  necessary  expenses  of  the  burial  of  the  work- 

man not  exceeding  $75. 

(b)  Where  the  widow  or  an  invalid  husband  is  the  sole 

dependant  a  monthly  payment  of  $20. 

(c)  Where  the  dependants  are  a  widow  or  an  invalid 

husband  and  one  or  more  children,  a  monthly 
payment  of  $20,  with  an  additional  monthly 
payment  of  $5  for  each  child  under  the  age 
of  16  years,  not  exceeding  in  the  whole  $40. 

(d)  Where  the  dependants  are  children  a  monthly  pay- 

ment of  $10  to  each  child  under  the  age  of 
16  years,  not  exceeding  in  the  whole,  $40. 

(e)  Where  the  workman  was  under  the  age  of  21  years, 

and  the  dependants  are  his  parents  or  one  of 
them,  a  monthly  payment  of  $20,  ceasing  when 
the  workman  would  have  attained  the  age  of  21 
years. 

(/)  Where  the  sole  dependants  are  persons  other  than 
those  mentioned  in  the  foregoing  clauses  a  sum 
reasonable  and  proportionate  to  the  pecuniary 
loss  to  such  dependants  occasion!  d  by  the  death, 
to  be  determined  by  the  Board,  but  not  exceed- 
ing in  the  whole  $40  per  month. 

Compensa- 


(2)   Where  permanent  total   disability  results  from   the  tion  in 
injury  the  amount  of  the  compensation  shall  be  a  weekl; 
payment  during  the  life  of  the  workman  equal  to  pe 

cent,   of  his  average  weekly  earnings  during  the  previou 


36 


SECOND  INTERIM  REPORT  OF  THE 


No.  53 


Duration  of 
payments 
under 
clause   (f) 
of  subsec- 
tion 1. 


twelve  mouths  if  he  has  been  so  long  employed,  but  if  not 
then  for  any  less  period  during  which  he  has  been  in  the 
employment  of  his  employer. 

(3)  In  the  case  provided  for  by  clause  (/.)  of  subsection 
1,  the  payments  shall  continue  only  so  long  as  in  the  opinion 
of  the  Board  it  might  reasonably  have  been  expected  had  the 
workman  lived  he  would  have  continued  to  contribute  to  the 
support  of  the  dependants. 


Marriage 
of  widow. 


Exception. 


Where 
workman 
leaves  no 
dependant, 
expense  of 
medical  at- 
tendance 
and  burial 
may  be 
ordered 
to  be  paid. 

Partial  or 
temporary 
disability. 


34. —  (1)  If  a  dependant  widow  marries  the  monthly 
payments  to  her  shall  cease,  but  she  shall  be  entitled  in  lieu 
of  them  to  a  lump  sum  equal  to  the  monthly  payments  for  two 
years  and  such  lump  sum  shall  be  payable  within  one  month 
after  the  day  of  her  marriage. 

(2)  Subsection  1  shall  not  apply  to  payments  to  a  widow 
in  respect  of  a  child. 

35.  Where  a  workman  leaves  no  dependants  such  sum  as 
the  Board  may  deem  reasonable  for  the  expenses  of  his  medi- 
cal attendance  and  of  his  burial  shall  be  paid  to  the  persons 
to  whom  such  expenses  are  due. 

36.  Where  the  disability  is  partial  or  temporary  the 
compensation  shall  be  a  weekly  payment  of  a  sum  propor- 
tionate to  the  impairment  of  the  earning  capacity  of  the 
workman  not  exceeding  in  any  case  per  cent,  of  his  average 
weekly  earnings  ascertained  in  the  manner  provided  by  sec- 
tion 39,  and  the  compensation  shall  be  payable  while  the 
disability  lasts. 


Compensa- 
tion not  to 
exceed 
percentage 
of  wages  in 
certain  cases 


When   pay- 
ments  to 
child   to 
cease. 


37.  The  compensation  payable  as  provided  by  subsection 
1  of  section  33,  shall  not  in  any  case  exceed  per  cent,  of 
the  average  monthly  earnings  of  the  workman  calculated  in 
the  manner  provided  by  section  39,  and  if  the  compensation 
payable  under  that  subsection  would  in  any  case  exceed  that 
percentage  it  shall  be  reduced  accordingly,  and  where  several 
persons  are  entitled  to  monthly  payments  the  payments  shall 
be  reduced  proportionately. 

38.  A  monthly  payment  in  respect  of  a  child  shall  cease 
when  the  child  attains  the  age  of  16  years. 

39. — (1)    Average   earnings   shall  be   computed   in   such 


How  aver- 
age earn- 
ings to  a  manner  as  is  best  calculated  to  give  the  rate  per  week  or 

month  at  which  (lie  workman  was  remunerated. 


1914        WOKKMEN'S  COMPENSATION   COMMISSION.  37 


(2)      Where  owing  to  the  shortness  of  the  time  during Shortness' 
which  the  workman  was  in  the  employment  of  his  employer  of  service 

'       J  l  •      «  .      or  its  casual 

or  the  casual  nature  of  his  employment  or  the  terms  of  it,  nature, 
it  is  impracticable  to  compute  the  rate  of  remuneration  as  of 
the  date  of  the  accident  regard  may  be  had  to  the  average 
weekly  or  monthly  amount  which  during  the  twelve  months 
previous  to  the  accident  was  being  earned  by  a  person  in 
the  same  grade  employed  at  the  same  work  by  the  same 
employer,  or  if  there  is  no  person  so  employed  then  by  a 
person  in  the  same  grade  employed  in  the  same  class  of  em- 
ployment and  in  the  same  locality. 


(3)  Where  the  workman  has  entered  into  concurrent  con-  where  two 
tracts  of  service  with  two  or  more  employers  under  which  employers 
he  worked  at  one  time  for  one  of  them  and  at  another  time 

for  another  of  them  his  average  earnings  shall  be  computed 
as  if  his  earnings  under  all  such  contracts  were  earnings  in 
the  employment  of  the  employer  for  whom  he  was  working 
at  the  time  of  the  accident. 

(4)  Employment  by  the  same  employer  shall  mean  em-  Meanin&  ot 
ployment  by  the  same  employer  in  the  grade  in  which  the  employment 
workman  was  employed  at  the  time  of  the  accident  uninter-  employer, 
rupted  by  absence  from  work  due  to  illness  or  any  other  rentiy!" 
unavoidable  cause. 

(5)  "Where  the  employer  was  accustomed  to  pav  the  work-  special 

d  .    1  ./     •  .  .        .       expenses 

man  a  sum  to  cover  any  special  expenses  entailed  on  him  by  not  to  be 
the  nature  of  his  employment  that  sum  shall  not  be  reckoned  * 
as  part  of  his  earnings. 

40.  In  fixing  the  amount  of  a  weekly  or  monthly  payment  Matters  to 
regard  shall  be  had  to  any  payment,   allowance  or  benefit  ered  in 
which  the  workman  may  receive  from  his  employer  during  payments, 
the  period  of  his  incapacity,  including  any  pension,  gratuity 

or  other  allowance  provided  wholly  at  the  expense  of  the 
employer. 

41.  The  amount  of  the  weekly  payment  in  the  case  of  nofto6 
partial  incapacity  shall  in  no  case  exceed  the  difference  be-  dffferen 
tween  the  average  weekly  earnings  of  the  workman  before  ^eesen 
the  accident  and  the  average  weekly  amount  which  he  is  whatedmayd 
earning  or  is  able  to  earn  in  some  suitable  employment  or  be  earned, 
business  after  the  accident  but  shall  bear  such  relation  to 

the  amount  of  that  difference  as  under  the  circumstances 
appears  just. 

42.  W7here  there  are  both  total  and  partial  dependants  the  Sn  ^de- 
compensation may  be  allotted  partly  to  the  total  and  partly  Dendants- 
to  .the  partial  dependants. 


ce 


38 


SECOND  IXTEE1M  KEPOET  OF  THE 


No.  53 


Board  may 
apply   pay- 
ment for 
benefit  of 
children 


43.  Where  the  Board  is  of  opinion  that  for  any  reason 
it  is  necessary  or  desirable  that  a  payment  in  respect  of  a 
child  should  not  be  made  directly  to  its  parent,  or  where  a 
dependant  child  has  no  parent  or  guardian,  the  Board  may 
direct  that  the  payment  be  made  to  such  person  or  be  applied 
in  such  manner  as  the  Board  may  deem  best  for  the  advan- 
tage of  the  child. 


THE  WORKMEN  S  COMPENSATION  BOARD. 


Workmen's 
Compensa- 
tion Board, 
how  consti- 
tuted. 


44.  There  is  hereby  constituted  a  Commission  for  the  ad- 
ministration of  this  Part  to  be  called  "The  Workman's  Com- 
pensation Board,"  which  shall  consist  of  three  members  to  be 
appointed  by  the  Lieutenant-Governor  in  Council  and  shall 
be  a  body  corporate. 


Chairman, 


Vice-chair- 
man. 


45.  One  of  the  Commissioners  shall  be  appointed  by  the 
Lieutenant-Governor  in  Council  to  be  the  Chairman  of  the 
Board  and  he  shall  hold  that  office  while  he  remains  a  mem- 
ber of  the  Board  and  another  of  the  Commissioners  shall  be 
appointed  by  the  Lieutenant-Governor  in  Council  Vice- 
Chairman  of  the  Board. 


When  vice-        46.   In  the   absence  of  the  Chairman   or  in  case  of  his 
may  act.        inability  to  act  or  if  there  is  a  vacancy  in  the  office,  the  Vice- 
chairman  may  act  as  and  shall  have  all  the  powers  of  the 
Chairman. 

Presumption       47.  Where  the  Vice-Chairman  appears  to  have  acted  for 

where  vice- 

chairman       or  instead   of   the   Chairman  it   shall   be   conclusivelv   pre- 
sumed  that  he  so  acted  for  one  of  the  reasons  mentioned  m 


the  next  preceding  subsection. 

omce'of  com-      48.  Each  Commissioner  shall,  subject  to  section  40  hold 
missioners.    0flplC.e  during  good  behaviour  for  a  period  of  ten  years  but 
may  be  removed  at  any  time  for  cause. 

Age  limit.  49.  Unless  otherwise  directed  by  the  Lieutenant-Gover- 

nor in   Council   a   Commissioner  shall   cease  to  hold   office 
when  he  attains  the  age  of  75  years. 


Re-appoint- 
ment. 


50.   A  Commissioner  if  not  disqualified  by  age  shall  be 


eligible  for  re-appointment. 


Commission-       51     J/;.,,.],  0f  (]10  Commissioners  shall  devote  the  whole  of 

ers  to  fcive 

whole  time     his  time  to  the  performance  of  his  duties  under  this  Part. 

to  duties. 

salaries  52.  The  salary  of  the  Chairman  shall  be  $ 

per  annum,   and   the  salary  of  each  of  the  other  Commis- 
sioners shall  be  $  per  annum. 


1914        WORKMEN'S  COMPENSATION   COMMISSION.  39 

53.  The  presence  of  two  Commissioners  shall  he  neces-  Quorum, 
sary  to  constitute  a  quorum  of  the  Board. 

54.  A  vacancy  in  the  Board  shall  not  if  there  remain  two  vacancy  not 
members  of  it  impair  the  authority  of  such  two  members  to  authority  if 

two  mem- 
act,  bers   re- 
main. 

55.  The  Board  shall  have  the  like  powers  as  the  Supreme  g°^redrs  of 
Court  for  compelling  the   attendance   of  witnesses   and   of 
examining  them  under  oath,  and  compelling  the  production 

of  books,  papers,  documents  and  things. 

56. — (1)   A  Commissioner  shall  not  directly  or  indirect-  ^o^Sto  bo 

ly  . disqualified 


in  certain 
cases. 


(a)  have,  purchase,  take  or  become  interested  in  any 

industry,  to  which  this  Part  applies  or  any 
bond,  debenture  or  other  security  of  the  person 
owning  or  carrying  it  on; 

(b)  be  the  holder  of  shares,  bonds,  debentures  or  other 

securities  of  any  company  which  carries  on  the 
business  of  employers'  liability  or  accident  in- 
surance ; 

(c)  have  any  interest  in  any  device,  machine,  appliance, 

patented  process  or  article  which  may  be  re- 
quired or  used  for  the  prevention  of  accidents. 

(2)  If  any  such  industry,  or  interest  therein,  or  any  such 
share,  bond,  debenture,  security,  or  thing  comes  to  or  be- 
comes vested  in  a  Commissioner  by  will  or  by  operation  of 
law  and  he  does  not  within  three  months  thereafter  sell  and 
absolutely  dispose  of  it  he  shall  cease  to  hold  office. 

57.  The  offices  of  the  Board  shall  be  situated  in  the  city  Boa^d5 
of  Toronto  and  its  sittings  shall  be  held  there,  except  where  tings3"" 
it  is  expedient  to  hold  sittings  elsewhere,  and  in  that  case  sit- 
tings may  be  held  in  any  part  of  Ontario. 

58.  The  Commissioners  shall  sit  at  such  times  and  con-  Proceed- 
duct  their  proceedings  in  such  manner  as  they  may  deem  Board, 
most  convenient  for  the  proper  discharge  and  speedy  despatch 

of  business. 

59. — (1)    The  Board  shall   appoint  a   Secretary  and  a  ^p0^1^"* 
Chief  Medical  Officer  and  may  appoint  such  auditors,  actu-  and  officers, 
aries,  accountants,  inspectors,  medical  referees,  clerks  and 
servants  as  the  Board  may  deem  necessary  for  carrying  out 
the  provisions  of  this  Part  and  may  prescribe  their  duties 


40 


SECOXD  INTERIM  REPORT  OF  THE 


Xo.  53 


Tenure 
of  office. 


Jurisdiction 
of  Board. 


Power  to 

reconsider. 


and,  subject  to  the  approval  of  the  Lieutenant-Governor  in 
Council,  may  fix  their  salaries. 

(2)  Every  person  so  appointed  shall  hold  office  during 
the  pleasure  of  the  Board. 

60. —  (1)  The  Board  shall  have  exclusive  jurisdiction  to 
examine  into,  hear  and  determine  all  matters  and  questions 
arising  under  this  Part  and  the  action  or  decision  of  the 
Board  thereon  shall  be  final  and  conclusive  and  shall  not  be 
open  to  question  or  review  in  any  court  and  no  proceedings 
by  or  before  the  Board  shall  be  restrained  by  injunction, 
prohibition  or  other  process  or  proceeding  in  any  court  or 
be  removable  by    certiorari  or  otherwise  into  any  court. 

(2)  Xothing  in  subsection  1  shall  prevent  the  Board 
from  reconsidering  any  matter  which  has  been  dealt  with  by 
it  or  from  rescinding,  altering  or  amending  any  decision  or 
order  previously  made,  all  which  the  Board  shall  have  author- 
ity to  do. 

61.  The  Board  may  award  such  sum  as  it  may  deem 
reasonable  to  the  successful  party  to  a  contested  claim  for 
compensation  or  to  any  other  contested  matter  as  compensa- 
tion for  the  expenses 'he  has  been  put  to  by  reason  of  or 
incidental  to  the  contest  and  an  order  of  the  Board  for  the 
payment  by  an  employer  of  any  sum  so  awarded  when  filed 
in  the  manner  provided  by  section  63  shall  become  a  judg- 
ment of  the  Court  in  which  it  is  filed  and  may  be  enforced 
accordingly. 

62.  The  Board  may  act  upon  the  report  of  any  of  its 
officers  and  any  enquiry  which  it  shall  be  deemed  necessary 
to  make  may  be  made  by  any  one  of  the  Commissioners  or 
by  an  officer  of  the  Board  or  some  other  person  appointed 
to  make  the  enquiry,  and  the  Board  may  act  upon  his  report 
as  to  the  result  of  the  inquiry. 

63.  An  order  of  the  Board  for  the  payment  of  compensa- 
tion by  an  employer  who  is  individually  liable  to  pay  the  com- 
pensation or  any  other  order  of  the  Board  for  the  payment 
of  money  made  under  the  authority  of  this  Part,  or  a  copy 
of  any  such  order  certified  by  the  Secretary  to  be  a  true 
copy  may  be  filed  with  the  clerk  of  any  county  or  district 
court  and  when  so  filed  shall  become  an  order  of  that  court 
and  may  be  en  forced  as  a  judgment  of  the  court. 

Regulations.  64.- -( \)  The  Hoard  may  make  such  Regulations  as  may 
be  deemed  expedient  for  carrying  out  the  provisions  of  this 
Part    and    a    certified    copy    of    everv    regulation    so    mad^ 


Power  of 
Board  as 
to  award- 
ing Com- 
pensation 
for  Ex- 
penses. 


Board   may 
act  on 
report  of 
officers. 


Enforce- 
ment of 
orders  of 
Board. 


1914       WORKMEN'S  COMPENSATION   COMMISSION.  41 


shall  be  transmitted  forthwith  to  the  Provincial  Secretary  Eieutenant- 
and  any  regulation  may  within  one  month  after  it  has  been  p°^rn,°,r 

~  , "  ,  to  disallow. 

received  by  the  Provincial  Secretary  be  disallowed  by  the 
Lieutenant-Governor  in  Council. 

(2)  After  the  period  for  disallowance  has  expired  every  publication. 
regulation  which  has  not  been  disallowed  shall  become  effec- 
tive and  shall  be  forthwith  published  in  the  Ontario  Gazette. 

(3)  Every  person  who  contravenes  any  such   regulation  Penalty. 

after  it  has  become  effective  or  any  rule  of  an  association 
formed  as  provided  by  section  97,  which  has  been  approved 
and  ratified  as  provided  by  that  section  shall  for  every  con- 
travention incur  a  penalty  not  exceeding  $50. 

65.   The  accounts  of  the  Board  shall  be  audited  by  the  Audit  of 
Provincial  Auditor  or  by  an  auditor  appointed  by  the  Lieu- 
tenant-Governor in  Council  for  that  purpose  and  the  salary 
or  remuneration  of  the  last  mentioned  auditor  shall  be  paid 
by  the  Board. 

66. —  (1)    The  Board  shall  on  or  before  the  day  of  Report  to 

v       .  ,  ,        T  .  d  Lieutenant- 

in  each  year  make  a  report  to  the  Lieutenant-  Governor. 
Governor  of  its  transactions  during  the  next  preceding  calen- 
dar year  and  such  report  shall  contain  such  particulars  as 
the  Lieutenant-Governor  in  Council  may  prescribe. 

(2)   Every  such  report  shall  be  forthwith  laid  before  the  j^1^  t0 
Assembly  if  the  Assembly  is  then  in  session  and  if  it  is  not  Aeforebl 
then  in  session  within  fifteen  days  after  the  opening  of  the 
next  session. 


of 


67.   The  Superintendent  of  Insurance  or  an  officer  of  his  superin 

r         .  p      tendent  „ 

Department  named  by  him  for  that  purpose  shall  once  in  insurance 
each  year  and  oftener  if  so  required  bv  the  Lieutenant-Gov-  into  affairs 

1  •       /-a  .-.  .     .       ,-,  '„.    .  -i-i-  p  and  business 

ernor  m  Uouncil  examine  into  the  affairs  and   business  ot  0f  Board, 
the  Board  for  the  purpose  of  determining  as  to  the  suffi-    . 
ciency  of  the  accident  fund  and  shall  report  thereon  to  the 
Lieutenant-Governor  in  Council. 


CONTRIBUTION  BY  THE  PROVINCE. 

68.   To  assist  in  defraying  the  expenses  incurred  in  the  Provincial 

'        '  firrsint   to- 

administration  of  this  Part  there  shall  be  paid  to  the  Board  wards  costs 
out  of  the  Consolidated  Revenue  Fund  such  annual  sum  not  tration. 
exceeding  $  as  the  Lieutenant-Governor  in  Council 

may  direct  and  such  sum  shall  be  payable  in  equal  quar- 
terly sums  on  the  first  day  of  each  quarter  commencing  on 
the'         day  of  19     . 


42 


SECOND  IXTEB1M  EEPOET  OF  THE 


No.  53 


ACCIDENT   FUND. 


How  acci- 
dent fund 
to  be 
provided. 

Compensa- 
tion pay- 
able out  of 
accident 
fund  in 
certain 
cases. 


69. — (1)  An  accident  fund  shall  be  provided  by  contri- 
butions to  be  made  in  the  manner  hereinafter  provided,  by 
the  employers  in  the  classes  or  groups  of  industries,  for  the 
time  being  embraced  in  Schedule  1,  and  compensation  pay- 
able in  respect  of  accidents  which  happen  in  any  industry, 
embraced  in  any  of  such  classes  or  groups,  shall  be  pay- 
able and  shall  be  paid  out  of  the  accident  fund. 


Industries 
in   Schedule 
2  not  to 
contribute. 


(2)  Notwithstanding  the  generality  of  the  description  of 
the  classes  mentioned  in  Schedule  1  none  of  the  industries 
embraced  in  Schedule  2  shall  form  part  of  or  be  deemed  to 
be  included  in  any  of  such  classes,  unless  it  is  added  to 
Schedule  1  by  the  Board  under  the  authority  conferred  by 
this  Part. 


Sufficiency 
of  accident 
fund  to  be 
maintained. 


70.  It  shall  be  the  duty  of  the  Board  at  all  times  to  main- 
tain the  accident  fund  so  that  with  the  reserves  it  shall  be 
sufficient  to  meet  all  the  payments  to  be  made  out  of  the  fund 
in  respect  of  compensation  as  they  become  payable  and  so  as 
not  unduly  or  unfairly  to  burden  the  employers  in  any  class 
in  future  years  with  payments  which  are  to  be  made  in  those 
years  in  respect  of  accidents  which  have  previously  happened. 


Industries 
not  specific- 
ally in- 
cluded  in 
classes. 


71.  If  any  trade  or  business  connected  with  the  indus- 
tries of : — 

Lumbering,  mining,  quarrying,  fishing,  manufacturing, 
building,  construction,  engineering,  transporta- 
tion, operation  of  electric  power  lines,  water- 
works and  other  public  utilities,  navigation, 
operation  of  boats,  ships,  tugs  and  dredges,  opera- 
tion of  grain  elevators  and  warehouses ;  team- 
ing, scavenging  and  street  cleaning;  painting, 
decorating  and  renovating,  dyeing  and  cleaning; 


or  any  occupation  incidental  thereto  or  immediately  con- 
nected therewith,  not  included  in  Schedule  2,  is  not  em- 
braced in  any  of  the  classes  mentioned  in  Schedule  1,  the 
Board  shall  assign  it  to  an  appropriate  class  or  form  an  addi- 
tional class  or  classes  embracing  the  trades  or  businesses  not 
so  embraced,  and  until  that  is  done  such  trades  and  businesses 
shall  together  constitute  a  separate  group  or  class  and  shall 
be  deemed  to  be  included  in  Schedule  1. 


1914        WORKMEN'S  COMPENSATION    COMMISSION.  L3 

72.— (1)    The  Board  shall  have  jurisdiction  and  author-  SbS^0" 

ity  to : — 

(a)  re-arrange  any  of  the  classes  for  the  time  being,  As  t0  re"    . 

i  i   •      n    i      t    i      -.  t       •   i    t  .  ^"  arrangement 

embraced  m  (Schedule  1,  and  withdraw  from  any  of  classes, 
class  any  industry  embraced   in  ii   and   transfer 
it  wholly  or  partly  to  any  other  class  or  form  it 
into  a  separate  class; 

(b)  establish  other  classes  embracing  any  of  the  indus-  Sjfothe?" 

tries  which  are  mentioned  in  Schedule  2,  or  are  classes- 
not  embraced  in  any  of  the  classes  in  Schedule 

i; 

(c)  add  to  any  of  the  classes  mentioned  in  Schedule1  ^sLef  t0 

1,  any  industry  which  is  not  embraced  in  any 
of  such  classes. 

(2)   Where  in  the  opinion  of  the  Board  the  hazard  to  work-  n\en£rof°n 
men  in  any  of  the  industries  embraced  in  a  class  is  less  than  assessment 
that  in  another  or  others  of  such  industries,  or  where  for  fo  h^zarcf 
any  other  reason  it  is  deemed  proper  to  do  so,  the  Board  may  of  busi- 

ness    etc 

sub-divide  the  class  into  sub-classes  and  if  that  is  done  the 
Board  shall  fix  the  percentages  or  proportions  of  the  contri- 
butions to  the  accident  fund  which  are  to  be  payable  by  the 
employers  in  each  sub-class. 


(3)  Separate  accounts  shall  be  kept  of  the  amounts  col-  Separate 

ill  ii-  <•  i  ,  accounts 

lected  and  expended  in  respect  oi  every  class  and  sub-class,  to  be  kept 
but  for  the  purpose  of  paying  compensation   the   accident  ciass  an(j 
fund  shall,  nevertheless,  be  deemed  one  and  indivisible.        sub-class. 

(4)  Where  a  greater  number  of  accidents  has  happened  in  varying  of 
any  industry  than  in  the  opinion  of  the  Board  ought  to  have  assessment 

.  .  in   certain 

happened  if  proper  precautions  had  been  taken  for  the  pre-  cases, 
vention  of  accidents  in  it,  or  where  in  the  opinion  of  the 
Board  the  ways,  works,  machinery  or  appliances  in  any  in- 
dustry are  defective,   inadequate  or  insufficient  the   Board 
may  add  to  the  amount  of  any  contribution  to  the  accident 
fund  for  which  an  employer  is  liable  in  respect  of  such  in- 
dustry such  a  percentage  thereof  as  the  Board  may  deem 
just  and  may  assess  and  levy  the  same  upon  such  employer, 
or  the  Board  may  exclude  such  industry  from  the  class  in 
which  it  is  embraced,  and  if  it  is  so  excluded  the  employer  Additional 
shall   be    individually    liable    to    pay   the    compensation   to  pe 
which  any  of  his  workmen  or  their  dependants  may  there- 
after become  entitled. 


44 


SECOND  INTERIM  REPORT  OF  THE 


Xo.  53 


Collection 
and  applica- 
tion of  ad- 
ditional per- 
centage. 


(5)  Any  additional  percentage  levied  and  collected  under 
the  next  preceding  subsection  shall  be  added  to  the  accident 
fund  or  applied  in  reduction  of  the  assessment  upon  the 
other  employers  in  the  class  or  sub-class  to  which  the  employer 
from  whom  it  is  collected  belongs  as  the  Board  may  de- 
termine. 


Withdraw- 
ing classes. 


73. —  (1)  The  Board  may  in  the  exercise  of  the  powers 
conferred  by  the  next  preceding  section  withdraw  or  exclude 
from  a  class  industries  in  which  not  more  than  a  stated  num- 
ber of  workmen  are  usually  employed  and  may  afterwards 
add  them  to  the  class  or  classes  from  which  they  have  been 
withdrawn,  and  any  industry  so  withdrawn  of  excluded  shall 
not  thereafter  be  deemed  to  be  included  in  Schedule  1  or 
Schedule  2. 


Employers 
in    indus- 
tries   with- 
drawn 
under   s.s. 
1    may 
elect   to 
become 
•members 
of  class. 


(2)  Where  industries  are  withdrawn  or  excluded,  from  a 
class  under  the  authority  of  subsection  1,  an  employer  in 
any  of  them  may,  nevertheless,  elect  to  become  a  member 
of  the  class  to  which,  but  for  the  withdrawal  or  exclusion 
he  would  have  belonged,  and  if  he  so  elects  he  shall  be  a 
member  of  that  class  and  as  such  liable  to  contribute  to  the 
accident  fund,  and  his  industry  shall  be  deemed  to  be  em- 
braced  in  Schedule  1. 


Powers 
may  be 
exercised 
as  occasion 
requires. 


When 
Regula- 
tions 
become 
effective. 


1'ublication. 


(3)  Notice  of  the  election  shall  be  given  to  the  Secretary 
of  the  Board  and  the  election  shall  be  deemed  to  have  been 
made  when  the  notice  is  received  by  him. 

74.  The  powers  conferred  by. the  next  preceding  two  sec- 
tions may  be  exercised  from  time  to  time  and  as  often  as  in 
the  opinion  of  the  Board  occasion  may  require. 

75.  A  regulation  or  order  made  by  the  Board  under  the 
authority  of  clause  (a)  or  clause  (b)  of  subsection  1  of  sec- 
tion 72,  shall  not  have  any  force  or  effect  unless  approved  by 
the  Lieutenant-Governor  in  Council,  and  when  so  approved 
it  shall  be  published  in  the  Ontario  Gazette  and  shall  take 
effed  "ti  the  expiration  of  one  month  from  the  first  publica- 
tion of  it  in  the  Ontario  Gazette. 


STATEMENTS    TO    BE    FUM  XI SUED    BY    EMPLOYERS. 


Statements 
to  be  fur- 
nished  by 
employers. 


76. — (1)   Every  employer  shall  on  or  before  the 
day  of  next   and  yearly  thereafter,  on  or  before 

ili"  clay  of  ,  or  on  or  before  such  date 

as  shall  be  prescribed  by  the  Board  prepare  and  transmit  to 
the  Board  a  statemenl  in  detail  of  the  names  and  ages  of  all 
his  employees  and  the  amount  of  the  wages  earned  by  each 


1914       WORKMEN'S  COMPENSATION   COMMISSION.  45 


of  them  during  the  year  then  last  past  verified  by  the  statu- 
tory declaration  of  the  employer  or  the  manager  of  the 
business,  or  where  the  employer  is  a  corporation  by  an  officer 
of  the  corporation  having  a  personal  knowledge  of  the  mat- 
ters to  which  the  declaration  relates. 

(2)  Where  the  business  of  the  emp7  ~yer  embraces  more  statements 
than  one  branch  of  business  or  class  of  industry  the  Board  branches, 
may  require  separate  statements  to  be  made  as  to  each  branch  etc- 

or  class  of  industry,  and  such  statements  shall  be  made,  veri- 
fied, and  transmitted  as  provided  by  subsection  1. 

(3)  If  any  employer  does  not  make  and  transmit  to  the  furnish 
Board  the  prescribed  statement  within  the  prescribed  time 

the  Board  may  base  any  assessment  or  supplementary  assess- 
ment thereafter  made  upon  him  on  such  sum  as  in  its  opinion 
is  the  probable  amount  of  the  pay  roll  of  the  employer  and  the 
employer  shall  be  bound  thereby,  but  if  it  is  afterwards  as- 
certained that  such  amount  is  less  than  the  actual  amount  of 
the  pay  roll  the  employer  shall  be  liable  to  pay  to  the  Board 
the  difference  between  the  amount  for  which  he  was  assessed 
and  the  amount  for  which  he  would  have  been  assessed  on 
the  basis  of  his  pay  roll. 

(4)  If  an  employer  does  not  comply  with  the  provisions  of  Penalty- 
subsection  1  or  subsection  2,  or  if  any  statement  made  in 
pursuance  of  their  provisions  is  not  a  true  and  accurate  state- 
ment of  any  of  the  matters  required  to  be  set  forth  in  it  the 
employer  for  every  such  non-compliance  and  for  every  such 
statement  shall  incur  a  penalty  not  exceeding  $500. 

.Assess  men  t 

77. —  (1)    If  a  statement  is  found  to  be  inaccurate  the  as-  may  be 
sessment  shall  be  made  on  the  true  amount  of  the  pay  roll  as  correspond 
ascertained  by  such  examination  and  enquiry  or  if  an  assess-  roils, 
ment  has  been  made  against  the  employer  on  the  basis  of 
his  pay-roll  being  as  shown  by  the  statement  the  employer 
shall  pay  to  the  Board  the  difference  between  the  amount  for 
which  he  was  assessed  and  the  amount  for  which  he  would 
have  been  assessed  if  the  amount  of  the  pay-roll  had  been  p 
truly  stated,  and  by  way   of  penalty   a   sum   equal    to   such 
difference. 

(2)    The   Board   if  satisfied   that   the   inaccuracy  of   the  ?e°fevemay 
statement  was  not  intentional  and  that  the  employer  honestly  penTity. 
desired  to  furnish  an  accurate  statement,  may  relieve  him 
from  the  payment  of  the  penalty  provided  for  by  subsec- 
tion 1  or  any  part  of  it. 


46 


SECOND  IXTEKIM  EEEOET  OE  THE 


No.  53 


Examina- 
tion of  ac- 
counts and 
books  of 
employer. 


8  Ed.  VII., 
C.  8. 


78. — (1)  The  Board  and  any  member  of  it,  and  any 
officer  or  person  authorized  by  it  for  that  purpose  shall  have 
the  right  to  examine  the  books  and  accounts  of  the  employer 
and  to  make  such  other  enquiry  as  the  Board  may  deem 
necessary  for  the  purpose  of  ascertaining  whether  any  state- 
ment furnished  to  the  Board  under  the  provisions  of  section 
76  is  an  accurate  statement  of  the  matters  which  are  re- 
quired to  be  stated  therein  or  of  ascertaining  the  amount  of 
the  pay-roll  of  any  employer,  and  for  the  purpose  of  any  such 
examination  and  enquiry  the  Board  and  the  person  so  ap- 
pointed shall  have  all  the  powers  which  may  be  conferred 
on  a  commissioner  appointed  under  The  Public  Inquiries 
Act. 


Penalty  for 
obstruction. 


Board   to 
have  right 
to  inspect 
premises  of 
employer. 


(2)  An  employer  and  every  other  person  who  obstructs  or 
hinders  the  making  of  the  examination  and  inquiry  men- 
tioned in  subsection  1,  or  refuses  to  permit  it  to  be  made  shall 
incur  a  penalty  not  exceeding  $500. 

79. — (1)  The  Board  and  any  member  of  it  and  any  offi- 
cer or  person  authorized  by  it  for  that  purpose  shall  have 
the  right  at  all  reasonable  hours  to  enter  into  the  establish- 
ment of  any  employer  who  is  liable  to  contribute  to  the 
accident  fund  and  the  premises  connected  with  it  and  every 
part  of  them  for  the  purpose  of .  ascertaining  whether  the 
ways,  works,  machinery  or  appliances  therein  are  safe,  ade- 
quate and  sufficient  and  whether  all  proper  precautions  are 
taken  for  the  prevention  of  accidents  to  the  workmen  em- 
ployed in  or  about  the  establishment  or  premises  and 
whether  the  safety  appliances  or  safeguards  prescribed  by 
law  are  used  and  employed  therein,  or  for  any  other  purpose 
which  the  Board  may  deem  necessary,  for  the  purpose  of 
determining  the  proportion  in  which  such  employer  should 
contribute  to  the  accident  fund. 


Penalty  for 
obstruction. 


Information 
obtained 
not  to  be 
divulged. 


Penalty. 


(2)  An  employer  and  every  other  person  who  obstructs 
or  hinders  the  making  of  any  inspection  made  under  the 
authority  of  subsection  1,  or  refuses  to  permit  it  to  be  made, 
shall  incur  a  penalty  not  exceeding  $500. 

80. — (1)  No  officer  of  the  Board  mid  no  person  author- 
ized to  make  an  inquiry  under  this  Part  shall  divulge  or  allow 
to  1)0  divulged  except  in  the  performance  of  his  duties  or 
mider  the  authority  of  the  Board  any  information  obtained 
by  him  or  which  has  come  to  his  knowledge  in  making  or  in 
connection  with  an  inspection  or  inquiry  under  this  Part. 

(2)  Every  person  who  contravenes  any  of  the  provisions 
of  subsection  1  -hall  incur  a  penalty  not  exceeding  $50. 


1914        WORKMEN'S  COMPENSATION   COMMISSION.  47 

81.  The  penalties  imposed  by  or  under  the  authority  of  and  appii- 
this  Part  shall  he  recoverable  under  The  Ontario  Summary  penalties. 
Convictions  Act  and  when  collected  shall  be  paid  over  to 

the  Board  and  shall  form  part  of  the  accident  fund. 

ASSESSMENTS. 

82.  The  Board  shall  on  or  before  the  day  of  2E5£onal 

,  19  ,  make  a  provisional  assessment  on  the  em-  ment- 
plovers  in  each  class  of  such  sum  as  in  the  opinion  of  the 
Board  will  be  sufficient  to  meet  the  claims  for  compensation 
which  will  be  payable  by  that  class  during  the  then  calendar 
year,  and  to  provide  a  reserve  fund  of  such  amount  as  the 
Board  may  deem  necessary  to  pay  the  compensation  payable 
in  future  years  in  respect  of  claims  in  that  class  for  acci- 
dents happening  in  that  year  and  also  to  meet  the  expenses 
of  the  Board  in  the  administration  of  this  Part  for  the  year. 

83.  The  sums  to  be  so  assessed  may  be  either  a  ijercent-  How  assess- 

£    1  -iiffi  i  i       nient  may 

age  oi  the  pay-rolls  ol  the  employers  or  a  specific  sum  as  the  be  based. 
Board  may  determine. 

84.  The  Board  shall  in  every  year  thereafter  assess  and  fsSs^Uent 
levy  upon  the  employers  in  each  of  the  classes  a  sum  sufficient  ments- 

to  pay  the  compensation  which  was  paid  in  the  next  preced- 
ing calendar  year  in  respect  of  injuries  to  workmen  in  in- 
dustries within  the  class  and  to  provide  a  reserve  fund  of 
such  amount  as  the  Board  may  deem  necessary  to  pay  the 
compensation  payable  in  subsequent  years  in  respect  of 
claims  in  that  class  which  arose  during  such  next  preceding 
year  and  also  to  pay  the  expenses  of  the  Board  in  the  ad- 
ministration of  this  Part  for  that  year  and  such  assessments 
may  be  based  upon  the  pay  rolls  of  the  employers. 

85.— (1)   The  Board  shall  determine  and  fix  the  propor-  g°£S2? 
tion  or  part  of  the  sum  for  which  a  class  is  so  assessed  under  ™be1etbPyy' 
the  provisions  of  either  of  the  next  preceding  two  sections  employer 
which  is  to  be  paid  by  the  employers  within  the  class  or 
within  any  sub-class  and  every  employer  shall  pay  to  the 
Board  the  sum  payable  by  him  within  15  days  after  notice 
of  the  assessment  and  of  the  amount  so  payable  has  been  Notice  of  as- 
given  to  him.  sessment. 

(2)   The  notice  may  be  sent  by  registered  post  to  the  em-  How  notlce 
ployer  and  shall  be  deemed  to  have  been  given  to  him  on  the  ™rveJ}e 
day  on  which  the  notice  was  posted. 

Insufficient 

86.  If  the  amount  intended  to  be  provided  for  by  the  tTbTmadl 
assessment  in  any  year  is  by  reason  of  the  failure  of  an  em-  pfementary 

assess- 
ments. 


48 


SECOND  IXTEE1M  EEPOET  OF  THE 


Xo.  53 


ployer  to  pay  his  proportion  of  it  or  from  any  other  cause 
insufficient  for  the  purpose  for  which  it  was  made,  the  Board 
may  make  supplementary  assessments  to  make  up  the  de- 
ficiency and  section  85  shall  apply  to  such  assessments. 

may  be  as-         87.  Where  the  payments  made  by  the  employers  in  any 

defic1encyrin  class  are  insufficient  to  meet  the  amount  of  any  assessment 

f  them.  Up0n  tke  employers  embraced  in  it  the  deficiency  shall  be 

made  up  by  supplementary  assessments  upon  the  employers 

in  all  the  classes  and  the  provisions  of  section  85  shall  apply 

to  such  assessments. 


Where  defi- 
ciency made 
good  by 
employer, 
mode  of  ap- 
plication of 
payment. 


88. — (1)  If  and  so  far  as  any  deficiency  mentioned  in 
the  next  preceding  two  sections  is  afterwards  made  good 
wholly  or  partly  by  the  defaulting  employer  the  amount 
which  shall  have  been  made  good  shall  be  apportioned  be- 
tween the  other  employers  in  the  proportions  in  which  the 
deficiency  was  made  up  by  them  by  the  payment  of  supple- 
mentary assessments  upon  them  and  shall  be  credited  to 
them  in  making  the  next  assessment. 


Employer 
not   as- 
sessed 
liable    to 
pay 

amount 
for   which 
he  should 
have    been 
assessed. 

Amount 
collected 
to   be 
taken 
into  ac- 
count  in 
making 
subse- 
quent as- 
sessment. 

Employer 
liable  to 
pay  unpaid 
sums. 


I  .i'-iitenant- 
Governor- 
in-Council 
may  require 
supplement- 
ary assess- 
ments to 
be  made. 


(2)  If  for  any  reason  an  employer  liable  to  assessment 
is  not  assessed  in  any  year  he  shall  nevertheless  be  liable 
to  pay  to  the  Board  the  amount  for  which  he  should  have  been 
assessed,  and  payment  of  that  amount  may  be  enforced  in 
the  same  manner  as  the  payment  of  an  assessment  may  be 
enforced. 

(3)  Any  sum  collected  from  an  employer  under  subsec- 
tion 2  shall  be  taken  into  account  by  the  Board  in  making 
an  assessment  in  a  subsequent  year  on  the  employers  in 
the  class  or  sub-class  to  which  such  employer  belonged. 

89.  Notwithstanding  that  the  deficiency  arising  from  a  de- 
fault in  the  payment  of  the  whole  or  part  of  any  assessment 
has  been  made  up  by  a  special  assessment  a  defaulting  em- 
plover  shall  continue  liable  to  pay  to  the  Board  the  amount 
of  every  assessment  made  upon  him  or  so  much  of  it  as  re- 
mains unpaid. 

90.  Whenever  the  Lieutenant-Governor  in  Council  is  of 
opinion  Ihat  the  condition  of  the  accident  fund  is  such  that 
with  the  reserves  it  is  not  sufficient  to  meet  all  the  payments 
to  be  made  in  respect  of  compensation  as  they  become  payable 
and  so  as  not  unduly  or  unfairly  to  burden  the  employers 
in  any  class  in  future  years  with  payments  which  are  to  be 
made  in  those  years  in  respect  of  accidents  which  have  hap- 
pened  in  previous  years,  he  may  require  the  Board  to  make 
;i   supplementary  assessment  of  such  sum  as  in  his  opinion 


1914        WOKKMEN'S  COMPENSATION   COMMISSION.  49 


is  necessary  to  be  added  to  the  fund,  and  when  such  a  require- 
ment is  made  the  Board  shall  forthwith  make  such  supple- 
mental assessment  and  it  shall  be  made  in  like  manner  as  is 
hereinbefore  provided  as  to  other  special  assessments  and 
all  the  provisions  of  this  Part  as  to  special  assessments  shall 
apply  to  it. 

91.  In  order  to  maintain  the  accident  fund  as  provided  ofl^ervei. 
1  ly  section  70  the  Board  may  from  time  to  time  and  as  often 

as  may  be  deemed  necessary  include  in  any  sum  to  be 
assessed  upon  the  employers  and  may  collect  from  them  such 
sums  as  may  be  deemed  necessary  for  that  purpose  and  the 
sums  so  collected  shall  form  a  reserve  fund  and  shall  be  in- 
vested in  securities  in  which  a  trustee  may  by  law  invest 
trust  moneys. 

92.  If  an  assessment  or  a  special  assessment  is  not  paid  Jo£fpjJ_for 
at  the  time  when  it  becomes  payable,  the  defaulting  em-  ^j^JntT"" 
ployer  shall  be  liable  to  pay  and  shall  pay  as  a  penalty  for 

his  default  such  a  percentage  upon  the  amount  unpaid  as 
may  be  prescribed  by  the  Regulations  or  may  be  determined 
by  the  Board. 

93.  Where  default  is  made  in  the  payment  of  any  assess-  J° "^u 
ment,  or  special  assessment,  or  any  part  of  it  the  Board  may  jjj*8^- 
issue  its  certificate  stating  that  the  assessment  was  made,  the 
amount  remaining  unpaid  on  account  of  it  and  the  person 

by  whom  it  was  payable  and  such  certificate  or  a  copy  of  it 
certified  by  the  Secretary  to  be  a  true  copy  may  be  filed  with 
the  clerk  of  any  county  or  district  court  and  when  so  filed 
shall  become  an  order  of  that  court  and  may  be  enforced  as 
a  judgment  of  the  court  against  such  person  for  the  amount 
mentioned  in  the  certificate. 

94. — (1)   If  an  assessment  or  a  special  assessment  or  anv  Board  may 

v     ;  r  i  i»  •      i  i  collect  as- 

part  of-  it  remains  unpaid  for  30  days  after  it  has  become  sessment 
payable,  the  Board,  in  lieu  of  or  in  addition  to  proceeding  as  municipal 
provided  by  the  next  preceding  section,  may  issue  its  cer- 
tificate stating  the  name  and  residence  of  the  defaulting  em- 
ployer, the  amount  unpaid  on  the  assessment,  the  establish- 
ment in  respect  of  which  it  is  payable,  and  upon  the  delivery 
of  the  certificate  to  the  clerk  of  the  municipality  in  which 
the  establishment  is  situate  he  shall  cause  the  amount  so 
remaining  unpaid  as  stated  in  the  certificate  to  be  entered 
upon  the  collector's  roll  as  if  it  were  taxes  due  by  the  de- 
faulting employer  in  respect  of  such  establishment,  and  it 
shall  be  collected  in  like  manner  as  taxes  are  levied  and 
collected  and  the  amount  when  collected  shall  be  paid  over 
by  the  collector  to  the  Board. 

4  w. 


50 


SECOND  INTERIM  REPOET   OE  THE 


No.  53 


Collector 
entitled   to 


(2)  The  collector  shall  be  entitled  to  add  five  per  cent, 
thereof  to  the  amount  to  be  collected  and  to  retain  such  per- 
centage for  his  services  in  making  the  collection. 


Employers 
to  give 
notice  of 
accidents. 


Penalty. 


RETURNS   OF  ACCIDENTS. 

t 

95. — (1)  Every  employer  shall  within  three  days  after 
the  happening  of  an  accident  to  a  workman  in  his  employment 
by  which  the  workman  is  disabled  from  earning  full  wages 
notify  the  Board  by  registered  post  of  the : — 

(a)  happening  of  the  accident  and  nature  of  it ; 

(&)  time  of  its  occurrence; 

(c)  Name  and  address  of  the  workman; 

(d)  place  where  the  accident  happened; 

(e)  name  and  address  of  the  physician  or  surgeon,  if 

any,  by  whom  the  workman  was  or  is  attended 
for  the  injury. 

(2)  For  every  contravention  of  subsection  1  the  employer 
shall  incur  a  penalty  not  exceeding  $50. 


Certain 
industrial 
diseases  to 
be  deemed 
accidents. 


By   whom 
compensa- 
tion pay- 
able. 


INDUSTRIAL    DISEASES. 

96. — (1)  Where  a  workman  suffers  from  an  industrial 
disease  and  is  thereby  disabled  from  earning  full  wages  at  the 
work  at  which  he  was  employed  or  his  death  is  caused  by  an 
industrial  disease  and  the  disease  is  due  to  the  nature  of  any 
employment  in  which  he  was  engaged  at  any  time  within 
twelve  months  previous  to  the  date  'of  his  disablement, 
whether  under  one  or  more  employments  the  workman  or 
his  dependants  shall  be  entitled  to  compensation  as  if  the 
disease  were  a  personal  injury  by  accident  and  the  disable- 
ment were  the  happening  of  the  accident,  subject  to  the 
modifications  hereinafter  mentioned,  unless  at  the  time  of 
entering  into  the  employment  he  had  wilfully  and  falsely 
represented  himself  in  writing  as  not  having  previously 
suffered  from  the  disease. 

(2)  Where  the  compensation  is  payable  by  an  employer 
individually  it  shall  be  payable  by  the  employer  who  last  em- 
ployed the  workman  during  such  twelve  months  in  the  em- 
ployment to  the  nature  of  which  the  disease  was  due. 


1914        WORKMEN'S  COMPENSATION   COMMISSION.  51 


(3)  The  workman  or  his  dependants  if  so  required  shall  ^mer  °f 
furnish  the  employer  mentioned  in  the  next  preceding  sub- ®™Pl0^®rrs_ 
section  with  such  information  as  to  the  names  and  addresses  of  nished  by 

.  claimants. 

all  the  other  employers  by  whom  he  was  employed  in  the 
employment  to  the  nature  of  which  the  disease  was  due  dur- 
ing such  twelve  months  as  such  workman  or  his  dependants 
may  possess,  and  if  such  information  is  not  furnished  or  is 
not  sufficient  to  enable  that  employer  to  take  the  proceedings 
mentioned  in  subsection  4  that  employer  upon  proving 
that  the  disease  was  not  contracted  while  the  workman  was 
in  his  employment  shall  not  be  liable  to  pay  compensation.. 

(4)  If  that  employer  alleges  that  the  disease  was  in  fact  pioyer  may 
contracted  while  the  workman  was  in  the  employment  of  some  fornfer" 
other  employer  he  may  bring  such  employer  before  the  Board  emPloyers- 
and  if  the  allegation  is  proved  that  other  employer  shall  be 

the  employer  by  whom  the  compensation  shall  be  paid. 

(5)  If  the  disease  is  of  such  a  nature  as  to  be  contracted  disease 
by  a  gradual  process  any  other  employers  who  during  such  gradual 
twelve  months  employed  the  workman  in  the  employment  to  mer^mpioy- 
the  nature  of  which  the  disease  was  due  shall  be  liable  to  ers^to  con- 
make  to  the  employer  by  whom  the  compensation  is  payable 

such  contributions  as  the  Board  may  determine  to  be  just. 

(6)  The  amount  of  the  compensation  shall  be  fixed  with  pemsation" 
reference  to  the  earnings  of  the  workman  under  the  em- t0  be  fixe  " 
pioyer  by  whom  the  compensation  is  payable  and  the  notice 
provided  for  by  section  20  shall  be  given  to  the  employer 

who  last  employed  the  workman  during  such  twelve  months 
in  the  employment  to  the  nature  of  which  the  disease  was 
due  and  the  notice  may  be  given  notwithstanding  that  the 
workman  has  voluntarily  left  the  employment. 

(7)  If  the  workman  at  or  immediately  before  the  date  of  ^0nSsuTsP"to 
the  disablement  was  employed  in  any  process  mentioned  in  f^|eauee  \o~ 
the  second  column  of  Schedule  3  and  the  disease  contracted  n*tu£e  _of 
is  the  disease  in  the  first  column  of  the  schedule  set  opposite  ment. 

to  the  description  of  the  process  the  disease  shall  be  deemed 
to  have  been  due  to  the  nature  of  that  employment  unless 
the  contrary  is  proved. 

(8)  Nothing  in  this  section  shall  affect  the  right  of  aRi*ht  to 

\    y  c  _  .....  i-i    compensa- 

workman  to  compensation  in  respect  of  a  disease  to  which  tion  where 
this  section  does  not  apply  if  the  disease  is  the  result  of  an  result  of 
injurv  in  respect  of  which  he  is  entitled  to  compensation  un-  not  to  "be7 
der  this  Part.  affected- 


52 


SECOND  IXTEEIM  KEPORT  OF  THE 


Xo.  53 


FORMATION    OF    ASSOCIATIONS. 


Associa- 
tions of 
employers 
may  be 
formed. 


Rules  of 
Associa- 
tions if 
approved 
by  Board 
and  Lieu- 
tenant Gov- 
ernor in 
Council  to 
be  binding 
on  the 
members 
of  the 
class. 

Where 
Inspector 
or  Expert 
appointed 
by  an  As- 
sociation 
his  salary 
may  be 
paid  out 
of  the  ac- 
cident fund 


Applica- 
tion of 
Part  1. 


97. —  (1)  The  employers  in  any  of  the  classes  for  the 
time  being  included  in  Schedule  1  may  form  themselves 
into  an  association  for  accident  prevention  and  may  make 
rules  for  that  purpose. 

(2)  If  the  Board  is  of  opinion  that  an  association  so 
formed  sufficiently  represents  the  employers  in  the  indus- 
tries included  in  the  class,  the  Board  may  approve  such 
rules,  and  when  approved  by  the  Board  and  by  the  Lieuten- 
ant-Governor in  Council  they  shall  be  binding  on  all  the  em- 
ployers in  industries  included  in  the  class. 

(3)  Where  an  association  under  the  authority  of  its  rules 
appoints  an  inspector  or  an  expert  for  the  purpose  of  acci- 
dent prevention,  the  Board  may  pay  the  whole  or  any  part 
of  the  salary  or  remuneration  of  such  inspector  or  expert 
out  of  the  accident  fund  or  out  of  that  part  of  it  which  is 
at  the  credit  of  any  one  or  more  of  the  classes  as  the  Board 
may  deem  just. 

98.  This  Part  shall  apply  only  to  the  industries  men- 
tioned in  Schedules  1  and  2  and  to  such  industries  as  may 
be  added  to  Schedule  1  under  the  authority  of  this  Part. 


PABT  II. 


Applica- 
tion of 
Sections 
100  to  102. 


Liability 
of  Employ- 
er for  de- 
fective 
ways. 

works,   etc., 
and  for 
negligence 
of  his 
servants. 


99.  Sections  100  to  102  shall  until  the  day  of 

191  ,  apply  to  every  industry  and  to  every  workman 
employed  in  it,  and  after  that  day  shall  apply  only  to  the 
industries  to  which  Part  I.  does  not  apply  and  to  the  work- 
men employed  in  such  industries. 

100.  Where  personal  injury  is  caused  to  a  workman  by 
reason  of  any  defect  in  the  condition  or  arrangement  of  the 
ways,  works,  machinery,  plant,  buildings  or  premises  con- 
nected with,  intended  for  or  used  in  the  business  of  his  em- 
ployer or  by  reason  of  the  negligence  of  his  employer  or 
<>1  any  person  in  the  service  of  his  employer,  the  workman  or 
if  the  injury  results  in  death  the  legal  personal  represen- 
tatives of  the  workman  and  any  person  entitled  in  case  of 
death  shall  have  an  action  against  the  employer,  and  if  the 
action  is  brought  by  the  workman  he  shall  be  entitled  to 
recover  from  the  employer  the  damages  sustained  by  the 
workman  by  or  in  consequence  of  the  injury,  and  if  the 
action  is  broughl  l.v  (he  legal  personal  representatives  of  the 


1914       WORKMEN'S  COMPENSATION   COMMISSION.  53 


workman  or  by  or  on  behalf  of  persons  entitled  to  damages 

under  The  Fatal  Accidents  Act  they  shall  be  entitled  to  re-  \  ®f-  v- 

cover  such  damages  as  they  are  entitled  to  under  that  Act. 

101.  A  workman  shall  hereafter  be  deemed  not  to  have  certain 
undertaken  the  risks  incidental  to  his  employment  or  those  faw  Tuils 
due  to  the  negligence  of  his  fellow  workmen  and  contributory  abro&ated- 
negligence  on  the  part  of  a  workman  shall  not  hereafter  be 

a  bar  to  recovery  by  him  or  by  any  person  entitled  to  dam- 
ages under  The  Fatal  Accidents  Act  in  an  action  for  the  re- 1  Geo.  v. 
co very  of  damages  for  an  injury  sustained  by  or  causing 
the  death  of  the  workman  while  in  the  service  of  his  em- 
ployer for  which  the  employer  would  otherwise  have  been 
liable. 

102.  Contributory  negligence  on  the  part  of  the  workman  Contribu- 
shall  nevertheless  be  taken   into   account  in   assessing:  the  tory  ne&ii- 

^  E"6nC6    tO    D6 

damages  in  any  such  action.  considered 


in  assess- 
ing dam- 
ages 


PART  III. 


KEPEAL. 


The  Workmen's  Compensation  for  Injuries  Act,  R.S.O.  Repeal. 
1897,  c.  160,  is  hereby  repealed. 


54  SECOKD  IXTEBIM  REPOKT  OF  THE  No.  53 


SCHEDULE  1. 

Industries  the  Employers  in  which  are  Liable  to  Contribute  to 

the  Accident  Fund. 

Class  1. — Lumbering;  logging,  river-driving,  rafting,  booming;  saw- 
mills, shingle-mills,  lath-mills;  manufacture  of  veneer  and  of 
excelsior;  manufacture  of  staves,  spokes,  or  headings. 

Class  2. — Pulp  and  paper  mills. 

Class  3. — Manufacture  of  furniture,  interior  woodwork,  organs, 
pianos,  piano  actions,  canoes,  small  boats,  coffins,  wicker  and  rattan 
ware;   upholstering;   manufacture  of  mattresses,  or  bed-springs. 

Class  4. — Planing  mills,  sash  and  door  factories,  manufacture  of 
wooden  and  corrugated  paper  boxes,  cheese  boxes,  mouldings,  win- 
dow and  door  screens,  window  shades,  carpet  sweepers,  wooden  toys, 
articles  and  wares  or  baskets. 

Class  5. — Mining;  reduction  of  ores  and  smelting;  preparation  of 
metals  or  minerals. 

Class  6. — Quarries;  sand,  shale,  clay  or  gravel  pits,  lime  kilns; 
manufacture  of  brick,  tile,  terra-cotta,  fire-proofing,  or  paving 
blocks,  manufacture  of  cement,  asphalt  or  paving  material. 

Class  7. — Manufacture  of  glass,  glass  products,  glassware,  porce- 
lain or  pottery. 

Class  8. — Iron,  steel  or  metal  foundries;  rolling  mills;  manu- 
facture of  castings,  forgings,  heavy  engines,  locomotives,  machinery, 
safes,  anchors,  cables,  rails,  shafting,  wires,  tubing,  pipes,  sheet 
metal,  boilers,  furnaces,  stoves,  structural  steel,  iron  or  metal. 

Class  9. — Car  shops. 

Class  10. — Manufacture  of  small  castings  or  forgings,  metal 
wares,  instruments,  utensils  and  articles,  hardware,  nails,  wire 
goods,  screens,  bolts,  metal  beds,  sanitary,  water,  gas  or  electric 
fixtures,  light  machines,  typewriters,  cash  registers,  adding  ma- 
chines, carriage  mountings,  bicycles,  metal  toys,  tools,  cutlery, 
instruments,  sheet  metal  products,  buttons  of  metal,  ivory,  pearl 
or  horn. 

Class  11. — Manufacture  of  agricultural  implements,  threshing 
machines,  traction  engines,  waggons,  carriages,  sleighs,  vehicles, 
automobiles,  motor  trucks,  toy  waggons,  sleighs  or  baby  carriages. 

Class  12. — Manufacture  of  gold  or  silverware,  platedware, 
watches,  watch-cases,  clocks,  jewellery,  or  musical  instruments. 

Class    13. — Manufacture    of   chemicals    or  explosives,     corrosive 

acids   or   salts,    ammonia,    calcium    carbide,  gasoline,    petroleum, 

petroleum   products,  celluloid,  gas,  charcoal,  artificial     ice,     gun- 
powder or  ammunition. 

Class  14. — Manufacture  of  paint,  color,  varnish,  oil,  japans,  turpen- 
tine, printing  ink,  printers'  rollers,  tar,  tarred,  pitched  or  asphalted 
paper. 

Class  15. — Distilleries,  breweries;  manufacture  of  spirituous  or 
malt  liquors,  alcohol,  wine,  vinegar,  mineral  water  or  soda  waters. 


1914       WORKMEN'S  COMPENSATION   COMMISSION.  55 


Class  16. — Manufacture  of  non-hazardous  chemicals  drugs, 
medicines,  dyes,  extracts,  pharmaceutical  or  toilet  preparations, 
soaps,  candles,  perfumes,  non-corrosive  acids  or  chemical  prepara- 
tions; shoe-blacking  or  polish. 

Class  17. — Milling;  manufacture  of  cereals  or  cattle  foods,  ware- 
housing or  handling  of  grain  or  operation  of  grain  elevators. 

Class  18. — Packing  houses,  abattoirs,  manufacture  or  preparation 
of  meats  or  meat  products  or  glue. 

Class  19. — Tanneries. 

Class  20. — Manufacture  of  leather  goods  and  products,  belting, 
saddlery,  harness,  trunks,  valises,  boots,  shoes,  gloves,  umbrellas, 
rubber  goods,  rubber  shoes,  tubing,  tires  or  hose. 

Class  21. — Manufacture  of  dairy  products,  butter,  cheese,  con- 
densed milk  or  cream. 

Class  22. — Canning  or  preparation  of  fruit,  vegetables,  fish  or 
food  stuffs;  pickle  factories  and  sugar  refineries. 

Class  23. — Bakeries;  manufacture  of  biscuits  or  confectionery, 
spices  or  condiments. 

Class  24. — Manufacture  of  tobacco,  cigars,  cigarettes  or  tobacco 
products. 

Class  25. — Manufacture  of  cordage,  ropes,  fibre,  brooms  or  brushes; 
work  in  manilla  or  hemp. 

Class  26. — Flax  mills;  manufacture  of  textiles  or  fabrics,  spin- 
ning, weaving  and  knitting  manufactories;  manufacture  of  yarn, 
thread,  hosiery,  cloth,  blankets,  carpets,  canvas,  bags,  shoddy  or  felt. 

Class  27. — Manufacture  of  men's  or  women's  clothing,  white 
wear,  shirts,  collars,  corsets,  hats,  caps,  furs  or  robes. 

Class  28. — Power  laundries;   dyeing,  cleaning  or  bleaching. 

Class  29. — Printing,  photo-engraving,  engraving,  lithographing, 
embossing;  manufacture  of  stationery,  paper,  cardboard  boxes, 
bags  or  wall-paper;    and  book-binding. 

Class  30. — Heavy  teaming  or  cartage;  safe-moving  or  moving  of 
boilers,  heavy  machinery,  building  stone  and  the  like;  warehous- 
ing, storage. 

Class  31. — Stone-cutting  or  dressing;  marble  works;  manufac- 
ture of  artificial  stone. 

Class  32. — Steel  building  and  bridge  construction;  installation  of 
elevators,  fire-escapes,  boilers,  engines  or  heavy  machinery. 

Class  33. — Brick-laying,  mason  work,  stone-setting,  concrete  work, 
plastering;  and  manufacture  of  concrete  blocks. 

Class  34. — Structural  carpentry. 

Class  35. — Painting,  decorating  or  renovating;  sheet  metal  work 
and  roofing. 

Class  36. — Plumbing,  sanitary  or  heating  engineering,  operation 
of  passenger  or  freight  elevators,  theatre  stage  or  moving  pictures. 

Class  37. — Sewer  construction,  deep  excavation,  tunnelling,  shaft- 
sinking  and  well-digging. 


56         SECOND  INTERIM  REPORT  OF  THE      No.  53 

Class   38. — Construction,     installation   or   operation     of     electric 
power  lines  or  appliances,  and  power  transmission  lines. 

Class  39. — Construction  of  telegraph  or  telephone  lines. 

Class  40. — Road-making  or  repair  of  roads  with  machinery. 

Class  41. — Construction  of  railways. 

Class  42. — Shipbuilding. 

Class  43. — Navigation. 

Class  44. — Dredging,  subaqueous  construction  or  pile  driving. 


1914        WORKMEN'S  COMPENSATION    COMMISSION.  57 


SCHEDULE  2. 

Industries  the  Employers  in  which  are  Individually  Liable  to 

Pay  the  Compensation. 

1.  The  trade  or  business,  as  denned  by  subsection  3  of  section  2, 
of  a  municipal  corporation,  a  public  utilities  commission,  any  other 
commission  having  the  management  and  conduct  of  any  work  or 
service  owned  by  or  operated  for  a  municipal  corporation,  a  board 
of  trustees  of  a  police  village  and  a  school  board. 

2.  The  construction  and  operation  of  railways  operated  by  steam, 
electric  or  other  motive  power,  street  railways  and  incline  railways, 
but  not  their  construction  when  constructed  by  any  person  other 
than  the  company  which  owns  or  operates  the  railway. 

3.  The  construction  and  operation  of  car  shops,  machine  shops, 
steam  and  power  plants  and  other  works  for  the  purposes  of  any 
such  railway  or  used  or  to  be  used  in  connection  with  it  when  con- 
structed or  operated  by  the  company  which  owns  or  operates  the 
railway. 

4.  The  construction  and  operation  of  telephone  lines  and  works 
for  the  purposes  of  the  business  of  a  telephone  company  or  used  or 
to  be  used  in  connection  with  its  business  when  constructed  or  op- 
erated by  the  company. 

5.  The  construction  and  operation  of  telegraph  lines  and  works  for 
the  purposes  of  the  business  of  a  telegraph  company  or  used  or  to 
be  used  in  connection  with  its  business  when  constructed  or  operated 
by  the  company. 

6.  The  construction  and  operation  of  steam  vessels  and  works  for 
the  purposes  of  the  business  of  a  navigation  company  or  used  or  to 
be  used  in  connection  with  its  business  when  constructed  or  operated 
by  the  company. 


58 


SECOND  INTERIM  EEPOET. 


No.  53 


SCHEDULE  3. 


Description  of  Disease. 


Description  of  Process. 


Anthrax. 


Lead     poisoning 
sequela?. 


or 


Mercury   poisoning   or 
sequelae. 

Phosphorus    poisoning 
its  sequela?. 


Arsenic    poisoning    or 
sequelae. 

Ankylostomiasis. 


its 
its 
or 

its 


handling  of  wool,  hair,  bristles,  hides, 
and  skins. 

Any  process  ..nvolving  the  use  of  lead  or 
its  preparations  or  compounds. 

Any  process  involving  the  use  of  mercury 
or  its  preparations  or  compounds. 

Any  process  involving  the  use  of  phos- 
phorous or  its  preparations  or  com- 
pounds. 

Any  process  involving  the  use  of  arsenic 
or  its  preparations  or  compounds. 

Mining. 


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